Back to Blog

Reaction to Bank of England decision (17/03/22)

by Shafiq Shabir
Head of Electronic Trading, Intertrader

If it were ever in any doubt, the outcome of today’s MPC meeting has shown that inflation is well and truly here to stay – and for even longer than most of us were anticipating.

With rumours of a near 10% inflationary peak to come by summer, it’s hardly a surprise that Threadneedle Street found themselves left with no other option than to raise interest rates for the third consecutive time. The committee will hope that today’s move will curb the ongoing cost of living crisis, but it’s becoming increasingly clear that horse has already bolted.

At this stage, the Bank of England appears to be more concerned about higher inflation than the very real risk of economic weakness, particularly as interest rates now sit at the same level they were pre-pandemic. But whether or not the MPC’s decision will threaten the UK’s post-pandemic growth remains to be seen, even as the Ukraine crisis darkens the wider global economic outlook.

With monetary policy and public purses both tightening, households and traders alike will now be looking ahead to the Budget to see what relief – if any – the Chancellor dishes out next week.

Published: 17 March 2022

You should under no circumstances consider the information and comments provided as an offer or solicitation to invest. This is a macro summary of scheduled news announcements and is not investment advice, independent research or an investment recommendation. The information provided is believed to be accurate at the date the information is produced.

Share this post

Back to Blog