BoE on hold – pushing back market expectations

In Kürze

The BoE’s Monetary Policy Committee delivered a dovish surprise by keeping its monetary policy unchanged last Thursday.


  • The BoE’s Monetary Policy Committee (MPC) delivered a dovish surprise last Thursday. Contrary to strong market (and our weak) expectations, it kept Bank Rate constant at 0.1%. It also maintained its QE programme.
  • While the decision was a strong push-back to elevated market expectations, the bank kept the prospect of a key rate hike "over coming months" alive. We see a first rate hike in December (by 15 bps) but do not expect Bank Rate to exceed 0.75% by the end of 2022. Hence, despite correcting in recent days, we regard current market expectations of an increase to 1% by the end of 2022 as still exaggerated.
  • Short-dated UK gilts tumbled after the BoE decision and upward momentum is likely to remain low in the face of still exaggerated BoE expectations. By contrast, we see more leeway for the long end of the curve to shift upwards as the end of the BoE’s reinvestments will have a lasting effect on the bond supply/demand balance.

Download the full publication below

BoE on hold – pushing back market expectations

© Generali Investments, alle Rechte vorbehalten. Diese Website wird von Generali Investments Luxembourg S.A. (Generali Investments) zur Verfügung gestellt und ist als Marketingkommunikation und Finanzwerbung für ihre Produkte und Dienstleistungen zu verstehen. Darüber hinaus kann die Website Marketingkommunikation und Finanzwerbung für Produkte und Dienstleistungen von Unternehmen enthalten, die Teil der von Generali Investments Partners S.p.A. Società di Gestione del Risparmio koordinierten Multi-Boutique-Plattform sind, insbesondere von Generali Global Infrastructure, Sycomore Asset Management, Aperture Investors LLC, Plenisfer Investments SGR, Lumyna Investments und Generali Real Estate S.p.A. Società di Gestione del Risparmio.