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

Why investors 'can't outrun' slow-moving demographics

Why investors 'can't outrun' slow-moving demographics

'Demographic change is a key megatrend'

Darius McDermott
clock 07 March 2024 • 5 min read
Spring Budget 24: Ten key takeaways from Jeremy Hunt's speech

Spring Budget 24: Ten key takeaways from Jeremy Hunt's speech

British ISA, Office for Budget Responsibility, tax cuts

Valeria Martinez
clock 07 March 2024 • 4 min read
Spring Budget 24: Chancellor unveils long-term UK growth plan

Spring Budget 24: Chancellor unveils long-term UK growth plan

Includes British ISA launch and further NI cut

clock 06 March 2024 • 1 min read