National Bank Financial is warning that central banks should proceed with caution as they try to take some of the monetary stimulus out of the economy.

The Bank of England hiked rates Thursday, pushing for its benchmark rate to a three-year high of 4.75%. Many investors also expect a rate hike in the U.S. next week. NBF notes that, in fact, central banks are in the process of normalizing interest rates around the globe, with monetary tightenings underway in the U.K., Australia, New-Zealand, and the U.S.

However, NBF says central banks need to be careful not to shut the taps too aggressively. In Britain, for example, “given that 12-month inflation still running at only 1.6%, the real policy rate has thus been pushed to above 3% — above the 2% threshold normally associated with a neutral policy rate in most industrialized countries.”

“In our opinion, the BoE will need to tread very carefully,” NBF says. “[Britain] is a highly leveraged economy with a still red-hot housing market – a sector that the BoE wants to cool. By attempting to target this asset class, however, there is a real possibility that the BoE could err on the side of ‘over-restrictiveness’.”