BoE has become more hawkish

In breve

As widely expected, the BoE raised Bank Rate to 0.5% from 0.25% today. However, the voting of the MPC members surprised on the upside as four of nine members voted for a 50 bps hike to 0.75%. Reaching the previously set threshold, the Committee also voted to begin to reduce the stock of UK government bonds by ceasing to reinvest maturing assets.
Market Commentary

Highlights:

  • Today, the BoE raised Bank Rate to 0.5% from 0.25% while four of nine MPC members voted for a 50 bps hike to 0.75%, signalling that the Bank has become more hawkish.
  • The Committee also voted to begin to reduce the stock of UK government bonds as well as non-financial investment-grade corporate bond by ceasing to reinvest maturing assets.
  • The BoE now sees inflation peaking at 7.25% in April, around 2 percentage points higher than expected in the November Report. This also suggests a stronger rate hiking cycle.
  • We had already revised our outlook for Bank Rate to 1% by end of this year and to 1.25% early 2023. Risks are now for hikes to come earlier. We will refine our outlook in an upcoming Focal Point.

Download the full publication below

BoE has become more hawkish
Picture

© Generali Investments, tutti i diritti riservati. Questo sito web è fornito da Generali Investments ed è considerato come una comunicazione di marketing e una promozione finanziaria riferita ai prodotti e servizi delle società elencate di seguito, appartenenti al Gruppo Generali: Generali Investments Partners S.p.A. Società di gestione del risparmio, Generali Insurance Asset Management S.p.A. Società di gestione del risparmio, Generali Investments Luxembourg S.A. e Generali Investments Holding S.p.A. (nel prosieguo, congiuntamente indicate come Generali Investments). Inoltre, il sito può contenere comunicazioni di marketing e promozioni finanziarie di prodotti e servizi di società appartenenti alla piattaforma coordinata da Generali Investments Partners S.p.A. Società di gestione del risparmio, nello specifico di Generali Global Infrastructure, Sycomore Asset Management, Aperture Investors LLC., Plenisfer Investments SGR, Lumyna Investments e Generali Real Estate S.p.A. Società di Gestione del Risparmio