Lee Sue Ann, an economist at UOB Group, assesses the latest BoE event, where the “Old Lady” raised the policy rate by 25 basis points.
Key comments
“The Bank of England (BoE), at its March meeting, voted by a majority of 8-1 to raise the bank rate by 25 basis points to 0.75%. This is the third consecutive policy meeting in which the BoE has raised its key interest rate, marking the fastest pace of tightening since 1997.and returning its monetary policy rate to pre-pandemic levels.”
“However, the BoE struck a more dovish tone, suggesting that the Monetary Policy Committee (MPC) expects an act of increasingly delicate balance in the coming months, as you consider the trade-off between strong inflation and weak growth“.
“We see room for a further rise of 25 basis points, due to the strength of the labor market and upward revisions to our inflation outlook. For now, we have drawn on the next upload at the meeting on May 5th. Thereafter, we expect a pause.”
Source: Fx Street
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