An earlier article on Wall Street mentioned that since the market has almost completely digested the expectation of a 15 basis point increase in interest rates in December, it is expected that the probability of a 15 basis point increase in interest rates will increase to more than 50% as soon as next month, and the Bank of England may be as early as 11. Raising interest rates on the month opened the door to curb inflation.
Last weekend, two officials from the Bank of England consolidated those signals that the central bank should raise interest rates immediately to curb inflation. One of them suggested that British households should actively face the Bank of England’s apparently “significantly earlier” rate hike than previously estimated. .
Michael Saunders, an extremely hawkish member of the Bank of England’s Monetary Policy Committee (MPC), hinted in media reports last Saturday (October 9) that investors were correct to advance the timing of the Bank of England’s interest rate hike. A few hours ago, Bank of England Governor Bailey warned that unless the MPC takes action, the UK may experience a “very damaging” period of inflation. Bloomberg economist Dan Hanson believes that the latest statement by the Bank of England officials means that the MPC “obviously may” start raising interest rates at the November monetary policy meeting.
Saunders, a former Citigroup economist, was one of two monetary policy committee members who voted last month to immediately end the Bank of England’s bond purchase program. According to the “Daily Telegraph” report, Saunders stated that he did not try to imply the exact meeting at which the MPC might take action. “It is appropriate that the market has shifted to a path of tightening pricing significantly earlier than before.”
The pound once soared to 0.4% on Monday, and then fell back to flat, as the market digested the remarks of two senior officials of the Bank of England over the weekend, suggesting that the Bank of England may raise interest rates as soon as possible at the next meeting. The Bank of England has previously decided to reduce the pace of weekly bond purchases, just as the Bank of Canada has reduced the scale of downsizing.
Normally, the Bank of England prepares for market rate hikes at at least one meeting, and then takes action through hawkish speeches and votes. The next meeting of the Bank of England will be held on November 4, when the latest monetary policy report will be released.
However, Bloomberg said that economists expect the Bank of England to first consider labor market data for several public assistance programs launched after the epidemic stabilizes. They do not want to see the unemployment rate rise, but Bailey has said that he does not expect the unemployment rate to rise further after the end of the program (see the impact of the government aid program on the US labor market).
The market predicts that the probability of raising interest rates at the November 4 meeting is 32%, and the probability of raising interest rates at the Bank of England meeting on February 3 is 84.9%, as investors are betting to speed up the pace of interest rate hikes.
It should be noted that the current UK benchmark interest rate is at a historically low level of 0.1%, but raising interest rates to 0.25% or even 0.5% will still keep interest rates in a very low region, which is still lower than the 0.75% level before the outbreak.
This article is from Wall Street’s knowledge, welcome to download the APP to see moreReturn to Sohu to see more
Editor:
Disclaimer: The opinions of this article only represent the author himself. Sohu is an information publishing platform. Sohu only provides information storage space services.
.