VIEW: J.P.Morgan: Feb BoE Hike Will Require Confidence Tide Has Turned

J.P.Morgan note that “unless the UK government decides on deeper COVID restrictions, we would not expect any new fiscal measures. Many of the emergency supports in place already ended in Q3, and without a discernable adverse impact despite activity in some sectors remaining depressed. This suggests no need for new measures. If there was still a doubt about the BoE’s meeting next week, the increase in government restrictions, likelihood of some growth impact and risk of more restrictions should leave the committee with an easy decision to hold fire for now. The BoE will still be overseeing an end to their planned asset purchases at the end of this month. We changed our rate call earlier this week to expect a hike in February instead of December. A lift off in February would require the MPC to be confident that the tide was turning back in a more positive direction, with signs that downside growth risks associated with the Omicron had faded.”