We wouldn’t completely rule it out, but we no longer expect the Monetary Policy Committee (MPC) to raise interest rates from 0.10% on Thursday 16th December. We now think rates will rise to 0.25% in February and to 0.50% in May. But if the COVID-19 restrictions were ramped up, rates may not be raised until the second half of 2022. As a result, we have grown more confident that investors have gone too far in pricing in rates rising to almost 1.00% by the end of 2022.
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