Latest News

BOE’s Bailey Likely to Vote to Hold Rates in November, HSBC Says

Economy54 minutes ago (Oct 26, 2021 10:42)



(Bloomberg) —

Bank of England Governor Andrew Bailey’s flurry of hawkish comments in recent weeks won’t translate into a vote for higher interest rates next week, according to HSBC Holdings Plc (LON:HSBA).

While markets are almost fully pricing in a 15-basis-point increase on Nov. 4, HSBC expects the nine-member Monetary Policy Committee to split 7-2 to keep borrowing costs on hold. Only Michael Saunders and Dave Ramsden, who pushed for an early end to bond purchases in September, opt to lift the benchmark lending rate, senior economist Liz Martins wrote in a note Tuesday.

Her outlook suggests a major surprise, with Bailey voting for no change after spending the past few weeks warning that the BOE would have to act to rein in inflation. His remarks drove a rush of bets for a move in November, at least six months earlier than most economists were anticipating.

With financial markets anticipating a move, no action probably would trigger criticism of the governor and the bank for not pushing back against growing expectations for a move in recent weeks. 

The BOE’s credibility with investors has taken a hammering for similar events in the past. Its guidance was called into question under former Governor Mark Carney, who was branded an “unreliable boyfriend” and accused by lawmakers of misleading markets about future rate moves.

Martins says she expects policy makers to address investors’ outlook next week. She thinks policy makers may seek to curtail expectations that rates will rise past 1% by the end of 2022.

Read More: BOE to Defy Bets on November Hike, Former Rate-Setters Say (2)

©2021 Bloomberg L.P.

BOE’s Bailey Likely to Vote to Hold Rates in November, HSBC Says

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Inflation expectations hit new seven-year high, shooting past ECB target

Previous article

UK lawmaker should be suspended over ‘egregious’ paid lobbying – watchdog

Next article

You may also like


Leave a reply

Your email address will not be published.

More in Latest News