BoE to unwind QE before it raises interest rates

The rapid rebound in economic activity revealed by this week’s data releases has started to prompt some questions about when and how the Bank of England will tighten monetary policy. Our answers are not until 2024, which is later than the tightening in late 2022 the markets have assumed, and by unwinding some quantitative easing first before raising interest rates. Both of those are consistent with the gilt yield curve steepening.