Rate raise with a 'hawkish twist'? Reaction to BoE's decision

Inflation expected to rise to 6%

Elliot Gulliver-Needham
clock • 4 min read

The Bank of England’s Monetary Policy Committee voted by a majority of five to four to raise interest rates from 0.25% to 0.5% on Thursday (5 February), in its first back-to-back increase since 2004.

While the hike had been overwhelmingly expected by markets, it was "arguably a sideshow compared to the details of the meeting which revealed there were four dissenters voting for a 50bps hike instead of just 25bps," according to Georgina Taylor, multi-asset fund manager at Invesco. The unexpected near miss of a hike to 0.75% was described as a "hawkish twist" by Russell Silberston, strategist for Ninety One. The hike had been expected by analysts due to the UK's high level of inflation, which the bank said last Thursday is expected to climb to 6% in February and March before peaking ...

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