According to HSBC, Bank of England Governor Andrew Bailey's recent flurry of hawkish comments will not convert into a vote for higher interest rates.
Deutsche Bank's View:
Deutsche Bank expects the Bank of England to raise interest rates by 15 basis points on November 4, as well as to complete its quantitative easing program earlier than expected.
"Our call for a rate hike next week is finely balanced," said Deutsche Bank economist Sanjay Raja, "with the committee likely to be split on the decision." "We anticipate a 6-3 vote in favour of a rate hike," but "we see a non-negligible possibility that a lift-off will be postponed until December.
Former Rate-Setters Views *(October 22nd 2021)*:
According to three former senior officials, the Bank of England will likely defy investors' expectations of a rapid interest-rate increase next month because it rarely changes policy in such a dramatic manner.
Credit Agricole's View:
"We doubt that there will be a majority at the MPC for a rate move next week and believe that the BoE will struggle to match the already highly hawkish market expectations," Valentin Marinov, head of G10 FX strategy at Credit Agricole, said.
Previous BoE Comments:
After the August report, bank staff have reduced their projections for the amount of UK GDP in 2021 Q3 by roughly 1%.
CPI inflation is predicted to grow further in the short term, to slightly more than 4% in 2021 Q4, due mostly to changes in energy and commodity costs. Inflation is predicted to climb further in the short term, reaching slightly more than 4% in the fourth quarter of 2021.
Saunders and Ramsden voted to lower the objective for gilt purchases. Saunders and Ramsden found growing evidence from a variety of global and local cost and pricing indicators that inflationary pressures will remain.
The predicted level of Q3 GDP is roughly 2.5% lower than the pre-COVID level. The committee determined that the current monetary policy stance was still acceptable.
Certain events in the interim time looked to have bolstered the argument for tightening, notwithstanding the fact that significant uncertainties persisted.
Any initial tightening should take the form of a bank rate increase.