JP Morgan preview Bank of England rate hike coming today: BoE have to create a recession

First from the JP Morgan preview of the Bank of England Bank of England The Bank of England (BoE) functions as the United Kingdom’s central bank and is one of the key drivers of monetary policy in Europe. As one of the world’s oldest central banks and established in 1694, the BoE is owned by the British government. Its central mandate involves maintaining and targeting interest rates while using other tools to help either stimulate or contract the economy. Moreover, the BoE is responsible for producing the UK’s bank notes as well as supervising key bank payment sy The Bank of England (BoE) functions as the United Kingdom’s central bank and is one of the key drivers of monetary policy in Europe. As one of the world’s oldest central banks and established in 1694, the BoE is owned by the British government. Its central mandate involves maintaining and targeting interest rates while using other tools to help either stimulate or contract the economy. Moreover, the BoE is responsible for producing the UK’s bank notes as well as supervising key bank payment sy Read this Term Monetary Policy Committee meeting coming up Thursday, 22 June 2023.

• UK inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term points to a cruel, cruel summer
• we strongly feel that the BoE should hike 50bps
• However, with no forward guidance on the issue .. we continue to forecast a 25bp hike

Yes. And Justin said it best:

• Hot UK inflation continues to vindicate higher BOE rates

Also from JP Morgan, this time less of a preview than a despairing of whats to come for the UK people:

• Karen Ward, a JP Morgan executive who is on the Chancellor’s economic advisory council, told the BBC: “The difficulty for the Bank of England – I mean, no-one envies them their job at the moment – is they have to therefore create a recession… It’s that weakness in activity which eventually gets rid of inflation.”

The BoE sure is an unenviable position. While DM central banks right around the globe have had to aggressively hike rates to fight inflation (excluding the Bank of Japan of course) the Bank of England's job has been made much, much harder by the Brexit debacle that has worsened supply chain snarls and the economy in the UK.

The Bank of England Monetary Policy Committee will announce their decision at 1100 GMT, which is 0700 US Eastern time.

• MUFG sees aggressive BOE rate hike amid surging UK inflation; 4 key takeaways

You'll notice the Swiss National Bank is on deck today also, at 0730 GMT, which is 0330 US Eastern time.

Previews of the Swiss National Bank:

• Goldman Sachs on EUR/CHF - see it lower

• Further tightening is expected