The BOE Edging Toward a Rate Pivot Sends a Signal to the ECB
Keeping up with the Fed is becoming less of a priority for other central banks.
Policy needs to be tighter, but not too tight.
Photographer: Hollie Adams/BloombergWinston Churchill's words at the turning point of World War II in 1942 are an apt summary of where the Bank of England currently finds itself: "Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.” And while the Federal Reserve remains committed to pushing borrowing costs higher than traders are anticipating, the European Central Bank is rapidly heading to the same point as its UK peer.
If ever there was a dovish 75 basis-point hike to interest rates, then the BOE has delivered it. By raising its official rate to 3% at the same time as explicitly signaling that it expects rates to peak some way below current market pricing, it has set itself apart from the other major central banks.