Chances of a May rate hike by BoE falls to just 8%

'Any other decision would be a major surprise'

Tom Eckett
clock • 3 min read

Market expectations of a May interest rate rise has fallen 90 percentage points in one month following weaker-than-expected GDP data, lower inflation and Bank of England governor Mark Carney's comments it was not a "done deal".

At its February meeting, the Monetary Policy Committee suggested a rate rise would be needed "somewhat earlier" and to a "somewhat greater extent" than anticipated in order to bring inflation back to its 2% target, causing market expectations of a May rate rise to jump 17 percentage points to 67%. More clarity was subsequently provided with regard to Brexit in March, a key issue for the MPC, with Michel Barnier and David Davis announcing both parties had agreed a large part of the transition deal when the UK leaves the bloc on 29 March 2019. These factors led markets to price in a 98% ch...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Economics / Markets

'Budget will be a reset for our economy' Reeves tells IMF colleagues

'Budget will be a reset for our economy' Reeves tells IMF colleagues

Autumn Budget on 30 October

Linus Uhlig
clock 24 October 2024 • 2 min read
Advisers urged not to let clients 'act too soon' ahead of Budget

Advisers urged not to let clients 'act too soon' ahead of Budget

Communication is about ‘staying calm and keeping clients focused’

Isabel Baxter
clock 22 October 2024 • 5 min read
Why the Bank of England needs to stop over-sharing

Why the Bank of England needs to stop over-sharing

'We are used to the comments of central bankers moving markets'

Laith Khalaf
clock 17 October 2024 • 4 min read