The Bank of England (BoE) will likely shy away from a bigger interest rate rise in August and instead stick to the more modest 25 basis point increases it has been delivering, but it is a very close call, per the latest Reuters poll of economists.
Bank of England policymaker Michael Saunders crossed the wires in the last hour, saying that they are not done on rate hikes.
BOE policymaker Saunders said on Monday that he thinks that “the tightening cycle may still have some way to go.”
The Bank of England (BoE) announced its monetary policy decision this Thursday and hiked rates for the fifth consecutive time to curb soaring inflation. The Monetary Policy Committee (MPC) voted 9-0 to raise rates by 25 bps to 1.25%.
The tortoise stays behind – the pound fails to receive any applause for the Bank of England's slow-mo approach to tackling inflation. One day after the Federal Reserve raised rates by 75 bps and hours after the Swiss National Bank shocked with a 50 bps move, the BOE's move looks inappropriate.
In line with expectations, the Bank of England (BoE) hiked the Bank Rate by another 25bp to 1.00%. As expected, attention was on forward guidance and not the rate hike itself. As we had expected, the BoE kept the softer forward guidance in place by stating “some degree of further tightening in monetary policy may still be appropriate in the coming months” (our emphasis).
The Bank of England has hiked for the fourth time, though there are further signs that policymakers believe market rate hike expectations have gone too far. We expect another 25bp hike in June and potentially also August, before the committee presses the pause button. The Bank of England has hiked rates by a further 25 basis points, taking Bank Rate to 1%.
The BoE on Thursday raised interest rates by 25 bps to 1.0%. Six of the bank's nine rate-setters supported the 25 bps hike, though three wanted a larger 50 bps move. The rate hike was in line with expectations, but the vote split was more hawkish than expected, with a Reuters poll showing that eight had been expected to support a 25 bps hike and one support no hike.
A UK recession is coming – the cat is out of the sack, and sterling bulls have turned into mice searching for shelter. There is room for more, as the volatile currency pair digests the decision and the monetary policy divergence with the Fed. And I would add that It could also drag the euro down.
In its latest monetary policy announcement, the Bank of England (BoE) opted to raise the benchmark UK interest rate by a further 25bps to 0.75% from 0.50%, as had been widely expected.
A dovish hike – the BoE has delivered a cautious increase of interest rates, similar to what investors had expected from the Fed. One dovish dissenter – Jon Cunliffe who preferred to leave rates unchanged – and a subtle change in tone are genuine reasons to sell sterling.
The UK has formally left the EU on January 31, 2020. However, Britain remains in a transition period, retaining most rights and obligations throughout the transition period which expires at the end of the year.
UK Prime Minister Boris Johnson has ruled out extending the implementation phase despite the COVID-19 pandemic. The deadline to request for such a prolongation passed on June 30. Without an accord, Britain will shift to World Trade Organization rules in 2021, an outcome seen as unfavorable for both sides, and especially the UK.
Several rounds of face-to-face and online talks have failed to yield substantial progress, with London and Brussels unable to reach a "landing zone" on fisheries, regulation, and a "level-playing field" – the EU's demand that the UK follows its rules in return for easy market access. Several political analysts expect to see progress only close to year-end.
Founded in 1694, the Bank of England (BoE) is the central bank of the United Kingdom. Sometimes known as the ‘Old Lady’ of Threadneedle Street, the Bank’s mission is "to promote the good of the people of the United Kingdom by maintaining monetary and financial stability".
The Bank of England is responsible for keeping the UK’s economy on the right track. They operate monetary policy by moving Bank Rate up and down and, in certain circumstances, we also supplement this with measures such as quantitative easing.
The official website, on Twitter and YouTube
Andrew Bailey is Governor of the BoE and Chairman of the Monetary Policy Committee, Financial Policy Committee and the Prudential Regulation Committee. The Governor joined the Bank on 16 March 2020. His appointment as Governor was approved by Her Majesty the Queen.
Bailey on his profile and Wikipedia
The World Interest Rates Table reflects the current interest rates of the main countries around the world, set by their respective Central Banks. Rates typically reflect the health of individual economies, as in a perfect scenario, Central Banks tend to rise rates when the economy is growing and therefore instigate inflation.
