BoE: May hike coming? - Rabobank

The Bank of England left its policy settings unchanged at today’s meeting, but the vote to maintain the Bank rate at 0.50% was only a 7-2 vote, which could be perceived as hawkish, but the two dissenters – Saunders and McCafferty – are not new to this game, explains the research team at Rabobank.

Key Quotes

“There wasn’t much new in the policy statement. Given the market’s strong beliefs about a rate hike in May, we would argue that the Bank’s silence gives consent.”

“Given the reduced tolerance for above-target inflation, we expect the Bank of England to aim for a second hike in November. This call is – however – on the premise that there will be relatively smooth trade talks between the EU and the UK and a sustained pick-up in wage inflation.”