- Prior 0.10%
- Bank rate 8-1 vote in favour of hike (Tenreyo dissented)
- Gilts purchases £875 billion
- Corporate bond purchases £30 billion
- Total asset program £895 billion (£895 prior)
- Gilts purchases vote - (9-0)
- Full statement here.
A surprise hike here from the BoE and EURGBP down sharply on the release. Omicron fears not enough to keep the BoE on the sidelines and a sensible move in order to move to normalisation in case inflation fears become more endemic. The rise in wages this week would have been a concern to the BoE. They said this in their statement:
'Bank staff continue to estimate that underlying earnings growth has remained above pre-pandemic rates, and the Committee continues to see upside risks around the projection for pay in the November Report'.
If the ECB are dovish later on watch for significant falls in EURGBP today. FTSE pressured, but financials like this. Higher interest rates suit banks as they can charge more for loans and this boosts overall profitability. GBPUSD heading up sharply now to 1.3400
