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Bank of England interest rate expectations (14/12/21)

by Shafiq Shabir
Head of Electronic Trading, Intertrader

If recent remarks made by Michael Saunders – one of two MPC members who voted to raise interest rates last month – are anything to go by, traders won’t be expecting the Bank of England to become the world’s first major central bank to raise interest rates from their historic low this week.

There’s no doubt that inflation is causing a persistent headache for central bankers, but with increased uncertainty around Covid-19, it may well be the case that the Bank has missed its opportunity to act. In reality, it is still early days with the emergence of Omicron, and we won’t know its economic impact for some time, while labour shortages continue to persist.

It’s easy to see the MPC taking a ‘wait and see’ approach until more evidence emerges. Should we see a rate rise, it would no doubt send a seismic shock through jittery financial markets – quite the turnaround from November.

Published: 14 December 2021

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.

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