The consensus expectation for the meeting of the Bank of England's Monetary Policy Committee today, Thursday, 22 June 2023, is for a 25bp rate hike.
The announcement is due at 1100 GMT, which is 0700 US Eastern time.
I posted earlier on the bleak task facing the MPC:
This snippet now on what happens to GBP depending on MPC action and guidance.
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+50 bps hike (35% probability) & Hawkish guidance
- hikes 50 bps and gives more hawkish guidance signalling that Bank Rate will likely be raised further.
- The Committee makes clear that it is more seriously worried about the strength in the recent data, especially inflation and wages.
- GBP/USD implication is +1.20%.
Base Case hike of 25 bps (50% probability) & Hawkish language
- hikes 25 bps and largely repeats its noncommittal guidance. That said, the language is more hawkish, with the MPC clearly getting worried about the strength of recent data prints, and the fact that inflation is coming down much more slowly than had been expected.
- The vote is 2-5-2 for 0/25/50, with Tenreyro and Dhingra voting for a hold while Mann and Haskel vote for a 50 bps hike.
- GBP/USD +0.50%.
A dovish +25bp rate hike (15%)
- MPC hikes 25 bps and reiterates guidance that ‘If there were to be evidence of more persistent pressures, then further tightening in monetary policy would be required’.
- The MPC actively pushes back against hawkish market pricing, potentially similar to last November.
- The vote is 2-6-1 for 0/25/50, with Tenreyro and Dhingra continuing to vote for a hold while one of Mann or Haskel votes for a 50 bps hike.
- GBP/USD -0.25%
Preview scenarios are via TD.
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