In the key week of the year for the central banks is also expected to pass Bank of England. La Boe will meet on Thursday 16 December. No press conference or new predictions are planned, so the focus will be on any changes in the tone of the statement. British inflation in November was higher than the BoE’s forecast, but there is little belief among analysts that this will be enough to induce the central bank to tighten first.
“The Bank of England is unlikely to pull the trigger on a rate hike this week given the substantial uncertainty surrounding Omicron – cut short the experts of Ing who see the first rate hike in February 2022 and a total of two hikes next year.
Ing points out that there may still be one or two officials voting for a raise this week, which was also seen last month. One of the November hawks, Michael Saunders, however, hinted that he could change his vote to “no change” this week. A unanimous decision to keep rates unchanged cannot therefore be ruled out.
He sees a stalemate too Althea Spinozzi, Senior Fixed Income Strategist for BG SAXO. “The market has long been expecting a 10 basis point rate hike from the Central Bank of England (BoE), but it could be disappointed once again – argues the expert -. The most aggressive member of the MPC, Michael Saunders, said he would need to think twice before raising interest rates, making a December rate hike less likely. The market is now rejecting expectations of a UK rate hike due to Covid restrictions. However, he still expects more than three interest rate hikes next year, the pace of interest rate hikes more aggressive than in other developed countries ”.