- Analytics
- News and Tools
- Market News
- BoE unexpectedly pauses its hiking cycle – UOB
BoE unexpectedly pauses its hiking cycle – UOB
Economist at UOB Group Lee Sue Ann reviews the latest BoE monetary policy meeting.
Key Takeaways
The Bank of England (BOE) left interest rates unchanged on Thu, ending a series of 14 consecutive rate hikes since Dec 2021, when the Bank Rate was just at 0.10%. The Monetary Policy Committee (MPC) had voted 5-4 in favor of maintaining the policy rate, with four members preferring another 25 bps hike to 5.50%.
The surprise move came after UK inflation printed significantly below expectations for Aug. Headline CPI had fallen further to 6.7% y/y, from 6.8% y/y in Jul, and down from the peak of 11.1% in Oct 2022. Core inflation also fell to 6.2% in Aug from 6.9% in Jul, and against consensus of 6.8%. The decline reflected the easing in both services and core goods price inflation.
Our view is that the BOE will keep all options on the table. Even though there is no meeting in Oct, as well as there being one set of wage (17 Oct) and inflation (18 Oct) data before the next meeting on 2 Nov, which is a little to chew on. Barring any huge upside surprise to services inflation or wage data, we think that given the scale of yesterday’s surprise by the BOE, there is a high chance it will choose to pause again in Nov. As such our base case remains for the Bank Rate to remain at 5.25% for the rest of this year.
© 2000-2024. All rights reserved.
This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.
Bank transfers
