This is a very brief outlook preview from Deutsche Bank, and its not good news if you are looking for the BoE to stop hiking rates any time soon. The TL;DR version is:
- Market pricing implies BoE are just as far away from the terminal rate as they were late last year
(Chart) ... shows how the market had assessed the BoE to be inching in the right direction, with the distance between the policy rate and the terminal rate priced by the market falling from September to March. Much of that hard work has been washed away of late though, with pricing suggesting that the UK is just as far away from its landing zone as it was late last year.
More:
- The rates market has aggressively repriced the Bank of England since the previous MPC meeting, on the back of the higher-than-expected CPI and wage numbers over the past few weeks.
- The terminal rate is now priced north of 5.75%, comfortably a fresh high for this cycle.
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The BoE's Monetary Policy Committee meeting is on Thursday, 22 June 2023:
- consensus is for a rate hike to 4.75% from the current 4.5%
- the statement, summary and minutes are due at 1100 GMT (0700 US Eastern time)
