BoE hikes Bank Rate to 4.5%

In breve

In its March meeting, the Monetary Policy Committee (MPC) of the BoE set a range of criteria (including the tightness of labour market conditions and the behaviour of wage growth and services inflation) which it would monitor to determine the persistence of inflationary pressures.

Highlights:

  • As widely expected, the Bank of England (BoE) raised Bank Rate by 25 bps to 4.5% today. The decision was taken by a 7-2 majority vote. For the fourth meeting in a row, two members (Tenreyro and Dhingra) voted to leave rates unchanged. 
  • The decision follows upside surprises in inflation and wage data. The BoE repeated its data-driven forward guidance, stating "If there were to be evidence of more persistent pressures, then further tightening in monetary policy would be required".
  • The Bank dropped forecasting a recession. Model results see CPI inflation to fall to 1.1% in two years’ time if Bank Rate followed the market path (expecting first cuts by the end of the year), and to 0.7% in Q2 2025 if Bank Rate were held constant at 4.5%. 
  • While we expect headline inflation to drop quite significantly with the April data release, core inflation as well as wage growth could prove sticky. We therefore see another hike in the next meeting now more likely than not. Even a second one cannot be excluded although weakness in global growth in H2 might well prevent this.
     

Download the full publication below

BoE hikes Bank Rate to 4.5%
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 Asset Management S.p.A. Società di gestione del risparmio & Generali Investments Luxembourg S.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 Asset Management S.p.A. Società di gestione del risparmio, nello specifico di Infranity, Sycomore Asset Management, Aperture Investors LLC., Plenisfer Investments SGR, Lumyna Investments, Sosteneo Infrastructure Partners SGR e Generali Real Estate S.p.A. Società di Gestione del Risparmio