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To hike or to hold? Three scenarios for the Bank of England’s next steps
Could the Bank of England pause its interest rate hiking cycle in September? Just a month ago, market pricing implied that would be highly implausible. Investors were close to pricing 50 basis-point rate hikes both in August and September – and indeed expected further moves to take Bank Rate well above 6%. We warned at the time that this seemed exaggerated, and sure enough there's been a big reappraisal of the Bank's tightening cycle over the past few weeks, culminating in the Bank delivering a more modest 25bp hike at its August meeting. A repeat move is largely priced for September, but markets are also factoring ... (full story)