Lee Sue Ann, an economist at UOB Group, estimates that the Bank of England will make its first interest rate hike in 2023.
Key statements:
“At its June meeting, the Bank of England (BoE) judged that the existing monetary policy stance was still appropriate.”
“The BoE also added that global price pressures have picked up further, but suggested that financial market measures of inflation expectations show that this short-term strength is expected to be transitory.”
“The debate on a rate hike between 2022 and 2023 is definitely heating up. While we certainly wouldn’t rule out a move earlier, our base argument for now is that the first rate hike comes in mid-2023. There are certainly reasons to wait amid lingering uncertainties. Unemployment later this year has a significant downside risk and it is unclear how well the job market will hold up once government support ends. How is, UK officials have pulled a leaf from the Fed’s book noting that it wants “significant” progress in idle capacity before considering a hike..”
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