BOE: Guidance will hold the key amid an expected 0.25% rate hike – Scotiabank

In the view of analysts at Scotiabank, the Bank of England (BOE) monetary policy decision this Thursday is expected to result in another 0.25% bank rate hike to 0.75%.

Read: BOE Interest Rate Decision Preview: A hat-trick and a difficult balancing act 

Key quotes

“We may see some more hawkish dissent in favur of a larger move.”

“Guidance will be key as upward pressure upon inflation that is already exceeding targets will be weighed against uncertainty stemming from the impact of the war in Ukraine.“

“That might be enough to tamp down reference to “some modest further tightening” being required given the BoE’s closer proximity to the war’s effects, but the BoE’s higher rate of core inflation (4.4% y/y) than the ECB’s, its continued rise, and the likelihood of further upward pressure have me thinking they’ll deliver a hawkish surprise to markets.”