The Bank of England is expected to keep the Bank Rate unchanged at 3.75% today with one or two hawkish dissenters.
The Bank of England is expected to keep the Bank Rate unchanged at 3.75% today with one or two hawkish dissenters. At the last meeting, the BoE delivered a hawkish hold with unanimous decision to leave rates unchanged and the removal of the easing bias.
Moreover, in the minutes, policymakers made it clear that they are focused on the risk of second-round effects with several members willing to hike rates if needed. Going into this meeting, the economic data hasn’t been screaming for urgent hikes. The latest UK CPI saw headline inflation rising to 3.3% vs 3.0% in the prior month, but that was very much expected due to the energy shock.
Core CPI ticked lower to 3.1% vs 3.2% prior, but Services CPI remained stubbornly elevated at 4.5% compared to 4.3% in the prior month. The UK unemployment rate fell to 4.9% vs 5.2% in the prior month with some slight easing in wage growth, although the data beat expectations. All in all, it wasn’t a bad report but not good either.