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.
- Bank raised rates by 25bps, disappointing those that had seen a ‘double hike’ of 50bps
- The slower pace of tightening signals an end of front-loading, and a return to gradualism
- Another 25bps likely in December, leaving year-end rates at 2.75%
The bank’s slower pace of tightening signals a shift among the board, with the balance of risks surrounding growth being prioritised over the still higher-than-expected rate of core inflation. In the subsequent press conference and policy statement, the bank flagged declining energy prices, spiralling consumer confidence and a weaker housing market as key factors in their decision, tilting the scales against a ‘double hike’ of 50bps, which was also considered.
The takeaway from the decision is that the September rate path projections remain largely intact outside of the longer-end. Longer-term path projections could come under pressure as slowing domestic demand counters pro-inflation inputs from end-2023 onwards. Nonetheless, in the short-term more tightening is likely, with the bank stating that another rate rise in December is the most likely outcome.
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.