Bank of England

The Bank of England must take the initiative and hike UK interest rates significantly if the decline in the British Pound is to be arrested, says a leading economic research consultancy.

The Bank of England raised Bank Rate by half a percentage point for a second time in September but warned that it could "respond forcefully" to anything that threatens to lift inflation further and since then there have been significant government policy announcements, some of which may matter to the BoE.

The Bank of England (BoE) lifted Bank Rate by half a percentage point for a second consecutive occasion in September in what may have been a surprise decision to anybody whose own expectations were guided by an oft-cited but also widely misunderstood Overnight Indexed Swap (OIS) market. 

The Bank of England raised interest rates by 50 basis points on Thursday, which was a smaller increment than the 75bp the market was expecting.

Some measures of UK inflation have continued to head in the wrong direction for the Bank of England (BoE) and in this context the details of its latest Inflation Attitudes Survey could be of significant concern to members of the Monetary Policy Committee (MPC) ahead of next Thursday's interest rate decision.

For GBP to remain supported the Bank might have to raise its basic interest rate to as high as 5% during this cycle according to new research.

The main UK inflation rate ebbed in August but core inflation reached a new high as price pressures broadened out across the economy, adding to the risk of the Bank of England (BoE) Monetary Policy Committee voting for something like its own modern day Charge of the Light Brigade in September.

The Bank of England must hike more than any other G10 central bank over the remainder of 2022 if it is to satisfy market expectations.

"The FX market is getting tired of waiting for the BoE to actually deliver something more hawkish." - HSBC's Dominic Bunning.

The Bank of England (BoE) won applause from within the Citigroup foreign exchange business on Friday for its upfront acknowledgement of the UK economic car crash in progress and simultaneous steely resolve to go on doing whatever is necessary to drive inflation back to the two percent target level.

The Bank of England's forecasts of a long and enduring UK recession has been branded unrealistic by Savvas Savouri, Chief Economist and Partner at hedge fund Toscafund Asset Management.

Sterling exchange rates fell ahead of the weekend and in the wake of August’s Bank of England (BoE) interest rate decision, which cast a pall over the outlook for the economy and prompted much commentary about the prospects of the Pound, some of which is included below.

The Pound to Dollar exchange rate slumped alongside other Sterling pairs on Thursday after the Bank of England (BoE) heaped further pressure onto already embattled companies and households with its largest interest rate rise for 27 years while offering an ominous warning about the outlook for the UK economy.

BoE hikes 50bp, GBP in "sell the fact" response.

Bank of England Governor Andrew Bailey has turned 'hawkish' and will deliver two successive 50 basis point hikes, according to new analysis.

The latest remarks and commentary suggest the Monetary Policy Committee at the Bank of England (BoE) is only one inflation number or employment report away from a step change in the pace at which Bank Rate is being lifted, and that any such step change could come as soon as the August policy decision. 

The Bank of England's Chief Economist says he stands ready to vote for a faster rate of interest rate hikes, should he see further signs inflation is becoming embedded in the UK.

The arrival of Nadhim Zahawi at the Treasury could herald greater pay hikes for public sector workers, increasingly embedded inflation expectations and more forceful interest rate hikes from the Bank of England.

The latest Forum on Central Banking in Sintra, Portugal, offered insight this week into the thinking of the European Central Bank (ECB), Bank of England (BoE) and Federal Reserve (Fed) while also providing clues about the things that will matter for their interest rate policies in the months ahead. 

Pound Sterling underperformed many major counterparts during the first half of the year overall and these losses may be a symptom of underperformance by the UK economy, according to Bank of England Governor (BoE) Andrew Bailey.