Bank of England: Hawkish hold risks and November hike – MUFG
MUFG’s Henry Cook expects the Bank of England to deliver a hawkish hold, with UK inflation driven higher by energy and headline CPI projected to exceed 4% after the January price cap reset.
MUFG's Henry Cook anticipates the Bank of England will deliver a hawkish hold at their meeting, with UK inflation expected to surpass 4% after the January price cap reset. The report indicates a soft labor market and minimal domestic price pressures, but still predicts 50 basis points of Bank of England tightening starting in November, contingent on energy prices.
The team expects a 6-3 vote at the meeting, although a 5-4 split would not be surprising, with Lombardelli most likely to join dissenters. The current position appears shaky due to energy market developments, and pre-emptive tightening on a risk management basis is expected to gain traction. The base case remains for 50bp of hikes starting in November.
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Also reported by 2 other outlets
- Central Bank puts rate-cutting cycle on hold en.thebell.io
- Chancellor announces Bank of England appointments bankofengland.co.uk
