What will the BOE do?

The Bank of England will announce its interest rate decision today at 15:00 GMT. All economists surveyed by Bloomberg expect the policy rate to remain unchanged at 5.25%, a 16-year high. Investors will be watching to see if there will be any policy easing signals accompanying the interest rate decision. The bank’s governor, Andrew Bailey, had stated that they were lagging behind the Fed and ECB in terms of easing monetary policy. However, the rapid improvement in inflation and the increasing risk of the economy entering a recession have led markets to price in the first BOE rate cut in mid-2024. The result of the vote on the BOE rate decision will also be on investors’ radar. In December, three members of the nine-member board voted for a rate hike, while six members supported keeping rates steady. Economists expect at least one of the three hawkish members to join the majority. “Any hawkish vote on the committee would make the BOE one of the rare banks whose members are still chasing rate hikes,” said Sanjay Raja, Senior Economist at Deutsche Bank.