BoE

  • BoE Chief Economist Pill says provided the jobs market continues to be strong, interest rates will need to gradually increase in the coming months
  • If data strengthens & inflation is forecast to remain persistently above target, we can continue to raise rates
  • If data evolves unfavourably & inflation is forecast to fall below target target, we can remain on hold, or reverse course
  • Economic picture still uncertain so BoE can't give precise guarantees on what will happen to interest rates
  • Does not see an immediate threat of UK inflation de-anchoring from it's 2% target at teh policy relevant medium term horizon
  • Incoming data support the conclusion that the recovery is continuing
  • The ground has been prepared for policy action

Pill is a hawk and has stressed earlier in the month about the risk of delaying too long on interest rate hikes (Nov 15).

Currently 65% chance of 10bps hike in December and Sonia futures pricing in just under 1% rise for next year.