BoE: November hike looking likely, but don't expect much after that - ING

The Bank of England's increasingly hawkish tone means that a rate hike increasingly looks like a question of "when" and "how much", rather than "if", according to James Smith, Developed Markets Economist at ING.

Key Quotes

“The choice of the phrase "next few months" to describe rate hike timing puts November firmly on the table. However, Brexit, borrowing and a lack of domestically-generated inflation mean we're not expecting a rate-hike run.”

“It seems the Bank is very keen to get out of "emergency mode" as the initial shock of Brexit subsides. It also seems that the committee is taking a leaf out of the Bank of Canada's book, by taking a more forward-looking approach to policymaking given the lags involved with tightening policy. But there's also likely a desire to avoid being left in the dust by the global race to tighten policy, as a result amplifying the pound's weakness.”

“But whilst we're now pencilling in a November hike, we think the chances of a series of hikes thereafter are low.”