Bank of England expected to hike interest rates by 25 bps in March and April

GBP

The pound gained on Thursday after comments made by MPC member Catherine Mann. She believes that inflation is still too high and further interest rate hikes are needed to bring it down. She also stated that interest rates at current levels are not high enough.

Mann went onto say she sees a ‘troubling change in expectations” regarding the outlook for inflation amongst households and businesses, which suggests to her inflation will remain elevated than currently anticipated. She reiterated that although the Bank of England has been aggressive in raising interest rates by historical standards, the pace has not been aggressive enough.

The BoE is expected by financial markets to hike interest rates by 25 basis points in March and again in April, taking the peak in Bank Rate to 4.5%.

Key announcements

13:30 – USD – Core PCE Price Index m/m