BoE’s less hawkish stance relative to the Fed likely to persist

With few signs the Fed’s hawkishness at its May meeting has spread to the Bank of England, we think that the downward revision to market interest rate expectations has much further to go. While we find it hard to argue very strongly about the precise timing of the policy tightening in the UK, we are more convinced that it will come later than in the US (in 2023) and the mid-2022 date the markets have assumed.