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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
EXECUTIVE SUMMARY:
- The MNI Markets Team, along with 80% of analysts and the majority of financial markets participants, had thought that the Bank of England would favour a risk management approach and wait until February/March for the first Bank Rate hike with Omicron cases rising fast in the UK.
- However, the MPC voted 8-1 to raise Bank Rate by 15bp to 0.25%, citing rising inflation (now expected to peak around 6% in April), a strong labour market and uncertain effects from the Omicron variant in the medium-term.
- While we would lean towards expecting a February hike, there are two uncertainties. First, what will happen with Omicron over the next 7 weeks? Case numbers look high now, and there is a decent probability of some further government measures in England after Christmas.
- Second, we caution the language surrounding the Bank’s future guidance has softened somewhat. In November, the statement read: “It will be necessary over coming months to increase Bank Rate.” Now the statement reads “Some modest tightening of monetary policy over the forecast period was likely to be necessary.” To us “coming months” sounds more imminent than “over the forecast period.”
Full document:
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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