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MNI STATE OF PLAY: BOE Set For Open-Ended QT, 50bp Hike Split

(MNI) London

Only two more MPC votes could tilt the BOE towards its first 50-basis-point hike of the cyle.

The Bank of England’s Monetary Policy Committee is likely to split over whether to announce a 25- or 50-basis-point hike on Thursday, as members weigh not only high inflation but also what they might declare to be a likely imminent recession.

Only two more votes would be needed to tip the scales towards the BOE’s first 50-point increase of the cycle, after Jonathan Haskel, Catherine Mann and Michael Saunders backed 50 in June. Gov. Andrew Bailey, one of six who voted for 25 basis points at the last meeting, has now confirmed the larger increase will be on the table, even if it is "not locked in." (See MNI INSIGHT: Shrunk, Sick Workforce Adds To BOE Pressure) Chief Economist Huw Pill, another of those who opted for 25 in June, has also sounded more hawkish, pointing to the danger of second-round effects driven by energy price rises.

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The Bank of England’s Monetary Policy Committee is likely to split over whether to announce a 25- or 50-basis-point hike on Thursday, as members weigh not only high inflation but also what they might declare to be a likely imminent recession.

Only two more votes would be needed to tip the scales towards the BOE’s first 50-point increase of the cycle, after Jonathan Haskel, Catherine Mann and Michael Saunders backed 50 in June. Gov. Andrew Bailey, one of six who voted for 25 basis points at the last meeting, has now confirmed the larger increase will be on the table, even if it is "not locked in." (See MNI INSIGHT: Shrunk, Sick Workforce Adds To BOE Pressure) Chief Economist Huw Pill, another of those who opted for 25 in June, has also sounded more hawkish, pointing to the danger of second-round effects driven by energy price rises.

Keep reading...Show less