While leaving interest rates at 3.75% today as widely expected, the Bank of England suggested it is more concerned about the upsides to inflation from the leap in energy prices triggered by the conflict in the Middle East than the downsides to activity. That said, in an unusual move presumably in response to the markets pricing in 75bps (basis points) of rate hikes, 100 minutes after the policy announcement Governor Bailey said “I would caution against reaching strong conclusions about us raising interest rates”.
For updated and more detailed analysis, see here.
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