The Bank of England announcement is due at 1200 GMT
Some snippets from analyst previews:
BNZ:
- The market is well priced for a 25bps hike from the Bank of England tonight, with some chance of a larger 50bps hike.
- Over six rate hikes are priced in this year and the market will be interested in how much the BoE pushes back on this. US data releases tonight are second-tier.
Standard Chartered
- the Bank of England will want to frontload rate hikes to address elevated inflationary pressures, and we continue to see 25bps moves at this week’s meeting and in May.
- Thereafter we expect the BoE to be more concerned over the growth impact, with the economy likely at risk from recessionary conditions from Q2- Q4. We, therefore, see the base rate climbing to 1.0% and remaining there for the remainder of the year, which is considerably less aggressive than the 6-7 rate hikes priced in by the markets by year-end.
Nomura
- In the absence of the Russia/Ukraine crisis having escalated there would almost certainly be more sizeable risks of the BoE delivering a 50bp hike. But in the event, geopolitical risks have intervened and a 25bp hike looks to be the most reasonable course of action for the MPC.
- Around 30bp is priced for the March meeting, reflecting around a 20% risk of a 50bp hike. No new forecasts are published by the Bank on this occasion but expect the minutes to say something about the Bank’s preliminary view on the potential impact of the war in Ukraine on the economy.
