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Bank of England raises rates, but sterling slides

As expected the Bank of England hiked rates for the first time since 2007 by a majority of 7-2, which was more or less what markets had been expecting, with David Ramsden and Jon Cunliffe voting against.


The pound and gilt yields slid sharply on the back of the removal of the line that interest rates may have to rise faster than markets currently expect. The removal of this line suggests that any further hikes are likely to come much further out into 2018. This is about as much as a dovish hike as you can get . It’s now on to the inflation report to put some flesh on the bones

The bank sees inflation at 2.4% in 2018 and 2.2% in 2019, while cutting its unemployment forecast.

The bank also sees GDP rising 1.6% in 2018 and 1.7% in 2019 and 2020.

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Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.

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