Bank of England leaning a bit more towards rate hikes rather than cuts

While leaving interest rates at 3.75% today as widely expected, the Bank of England suggested it is more concerned about the upsides to inflation from the leap in energy prices triggered by the conflict in the Middle East than the downsides to activity. That said, in an unusual move presumably in response to the markets pricing in 75 basis points of rate hikes, 100 minutes after the policy announcement Governor Bailey said “I would caution against reaching strong conclusions about us raising interest rates”.

At 3pm GMT today we will be hosting a 20-minute online Drop-In to discuss the similarities and differences in the outlook for Bank of England, ECB and Fed policy. (Register here.)