Bank of America Expects Bank of England to Hold Rates on Thursday, With Hikes Seen in July and September

Bank of America analysts said the Bank of England was unlikely to follow the European Central Bank with a rate increase on Thursday, and that this was not expected to materially undermine market confidence in the pound. According to Jin10, the analysts said markets were currently concerned about the risk of a policy mistake by the European Central Bank. They added that “second-round effects” driven by elevated energy prices would be closely watched, which they said should support further UK rate increases in the future. The analysts said markets would welcome a more balanced stance from the Bank of England between the risks of high inflation and weakening employment. They noted that if price shocks persisted, the Bank of England could be seen as falling behind developments, but said this was not the case at present. Bank of America said it expected the Bank of England to keep interest rates unchanged on Thursday, but to raise rates in July and September.