Following the "ugly" UK CPI report on Wednesday, Antoine Bouvet, a strategist at ING had this to say regarding the rate decision, “This cements the call for another 25-basis-point hike at this week’s meeting,”.
Toronto-Dominion Bank's Views:
“It’s a very tough situation,” said Pooja Kumra, senior European rates strategist at Toronto-Dominion Bank. “the BoE is dealing with inflation that is seeing no signs of abating, a labor market that is very tight and a strained global financial system".
On March 13th, traders priced in only one more 25 BPS rate hike.
Deutsche Bank's View:
Sanjay Raja, chief UK economist at Deutsche bank, claimed the situation to be "live," though maintaining their 0.25ppt increase.
Following the banking crisis, Barclays now expects the BoE to hold rates at 4%.
Silvia Ardagana, Chief European economist at Barclay's said this in the fallout, "we change our call and expect the BoE to pause next week and reassess the need for further rate hikes at the May meeting."
Previous BoE Comments:
Following the February rate hike, the BoE estimated Q4 2022 GDP growth at an increase of 0.1%, seeing Q1 2023 at -0.1% QoQ.
BoE estimates GDP growth of +0.1% QoQ for Q4 2022 (December forecast: -0.1% QoQ), sees -0.1% QoQ in Q1 2023.
BoE MPC no longer says that "it will respond forcefully" on rates or that "further increases in bank rate may be required"'
BoE: Past increases in the bank rate are expected to have an increasing impact on the economy in the coming quarters.
BoE: We see recession with just under 1% peak-to trough fall in GDP over 5 quarters vs November forecast of around 3% fall over 8 quarters.