The Bank of England meet today, earlier preview here:
Bank of England 25bp rate hike baked in for Thursday 03 February 2022
The Bank of England statement is due at 12 GMT and Governor's Bailey will follow up, speaking at 1230 GMT
Via Scotia:
- we see a 25bps hike but some pushback against market pricing (GBP downside risk)
- Market pricing for the BoE has held steady at a 95-100% chance of a hike tomorrow and a total of five 25bps hikes by end-2023. We think it’s more likely that the bank delivers only 100bps in rate increases this year, which should eventually act as a headwind for the GBP as markets reprice expectations
- We see the 1.36 mark as a near-term ceiling for the GBP
- It would take a clear sign from the BoE that it is willing to go above its neutral rate for the pound to test 1.38
