BoE: May should be a close call – UOB

Lee Sue Ann, Economist at UOB group, reviews the latest BoE monetary policy meeting.

Key Takeaways

“As expected, the Bank of England (BoE)’s Monetary Policy Committee (MPC) voted by a majority of 7-2 to increase the Bank Rate by 25bps to 4.25%. The latest decision marked the 11th increase since the BoE started hiking in Dec 2021.”

“Clearly, the BoE is in a difficult position, and rightly so, has left the door open to options, indicating that if there were to be evidence of more persistent pressures, then further tightening in monetary policy would be required.”

“There is no monetary policy decision in Apr, and the next one on 11 May is still some time away. Whether the MPC will be comfortable with pausing by the time of the next meeting in May will depend very much on incoming data and developments. We are still expecting a 25bps hike in May (albeit with lower confidence), solely on the premise of the BoE’s focus on fighting inflation.”