Bank of England Biggest Rate Hike in 33 Years

Bank of England Biggest Rate Hike in 33 Years

The Bank of England is set for biggest rate hike in 33 years later today at 14.00 GMT+2.

The market expects the Bank of England to raise interest rates by 75 basis points on Thursday, its largest hike since 1989, but economists believe policymakers will strike a dovish tone looking ahead as the prospect of a recession deepens.

With U.K. inflation running at a 40-year high of 10.1% in September, the Bank is seen hiking its main lending rate for the eighth consecutive time, but weaker growth momentum and a major shift in fiscal policy is expected to ease calls for more aggressive monetary tightening.

New Prime Minister Rishi Sunak has scrapped the controversial tax cuts at the heart of predecessor Liz Truss’ fiscal policy agenda, meaning fiscal and monetary policy are no longer pulling in opposite directions.

Should a 75-basis point hike on Thursday be accompanied by dovish rhetoric, as economists expect, sterling could be left vulnerable and there is an opportunity to trade.

Thursday 3rd November 2022 High Impact Events

The times below are GMT+2

14.00 – UK – BOE Monetary Policy Report, MPC Official Bank Rate Votes, Monetary Policy Summary, Official Bank Rate

Potential instruments to Trade: GBP Crosses.

14.30 – UK – BOE Gov Bailey Speaks

Potential instruments to Trade: GBP Crosses.

14.30 – US – Unemployment Claims

Potential instruments to Trade: USD Crosses.

16.00 – US – ISM Services PMI

Potential instruments to Trade: USD Crosses.

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