Marcus Ashworth, Columnist

BOE’s Acute Inflation Pain Augurs Another Interest Rate Hike

Tighter policy is the likely path even as the economy stumbles.

September 19, 2023 at 4:00 AM UTC

Marcus Ashworth is a Bloomberg Opinion columnist covering European markets. Previously, he was chief markets strategist for Haitong Securities in London.

Swati Dhingra, the Bank of England’s lonely dove.
Photographer: Bloomberg/Bloomberg

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The Bank of England will likely raise interest rates for the 15th consecutive time on Thursday to 5.5%. Market expectations price in a 70% chance of the 25 basis-point hike, but it will likely be the last. One and done is the broad expectation; however, it’s no sure thing. The Monetary Policy Committee could decide to pause — reasoning enough tightening has already been delivered.

The MPC has been sending mixed messages with both Governor Andrew Bailey and Chief Economist Huw Pill suggesting that rates are nearing their “Table Mountain” peak. Their most hawkish colleague, Catherine Mann, prefers to “err on the side of tightening further." The most dovish committee member, Swati Dhingra, has argued current policy is already sufficiently restrictive.