Bank of England tightening expectations may need to adjust lower

Analysts at BBH think that the Bank of England tightening expectations may need to adjust lower.

Swaps market back to pricing in a peak policy rate near 4.75%

"The Office for National Statistics reported that 6 out of 10 surveyed are planning to cut spending during the holiday period by buying fewer and less expensive presents as well as by eating out less. The ONS survey ran through mid-December and also showed 18% had no savings to cushion the rising cost of living and 7% had missed a payment on a bill in the past month."

"Almost half have had difficulty heating their homes and a third have struggled with rising rents or mortgages. With little relief expected on the fiscal front, it’s shaping up to be a very difficult winter for UK households. In related news, a separate consumer survey showed nearly 2 mln UK households had failed to make at least one mortgage, rent, loan, credit card, or any other bill payment over the last month."

"Bank of England tightening expectations may need to adjust lower. WIRP suggests a 50 bp hike February 2 is about 75% priced in, with no odds of a larger 75 bp hike. The swaps market back to pricing in a peak policy rate near 4.75% vs. 4.5% right after last week’s BOE decision but still down sharply from 6.25% right after the mini-budget in late September."

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.