Gilt Week Ahead: Another BOE hike fully priced this week

• The highlight of the week ahead for UK markets will be the Bank of England MPC meeting, with the policy decision, statement and Minutes all due for release on Thursday.
• At the time of writing, markets are pricing in around 30bp (so fully pricing a 25bp hike with around a 20% probability of a 50bp hike). This is down from a peak of around 45bp priced in mid-February. Views seem to be split between whether there will be a 9-0 unanimous vote or whether any of the four MPC members who voted for a 50bp hike in February will vote for another 50bp hike this week.
• In addition to the MPC meeting, we also get labour market data on Tuesday with wage growth in focus, particularly after Tenreyro’s recent comments that the BOE’s Agents Survey has picked up evidence of wage increases. This will of course be a very important factor for the MPC when judging how much wider inflationary pressures will be passed through with second round impacts.
• See the full document for gilt supply previews for the week ahead, QE tracker and BOE purchase analysis, cash flow matrix and issuance calendar.

GiltWeekAhead14032022.pdf