It's a headache if you're at the Bank of England
today, if you're an NBC mentor, I mean
, what do you vote for? What are the
chances of a half a point hike today? Frine
markets are pricing a 40% chance of a half point
jumbo hike. But economists reckon it will be 25
basis points. The reason for this decision split is
because of course, we had that fourth upside inflation
surprise yesterday. So as you say, it's a
difficult moment for the Bank of England. But economists
reckon the 50 is going to come in August by
then you'll have a press conference, you'll have the
forecasts that should make it more easy to communicate why
they're going back to acting forcefully. Also by then
Sylvana 10 Raro Big dove on the committee will have
been replaced by Megan Green and she's been making hawkish
noises recently. So as for today, some economists
reckon you're going to get a three way vote split
between the doves like 10 Raro and Swat Dinger,
emphasizing that the previous 12 hikes still have to filter
through to the economy going for a hold on the
other hawkish end. So Catherine Mann, Jonathan Haskell
going for 50 the rest in the middle going for
25. But really the question today is also about
the future path for rates ahead. Markets pricing a
peak rate of 6% by December. Some traders seeing
6.25%. Bloomberg economics says that 6% would trigger a
recession in the UK. Will the Bank of England
Governor Andrew Bailey push back against market expectations? It
often seems that the bank thinks it's above doing that
but it made an exception in November. Will it
do it again? Will the markets take the message
? If not, looks like credibility could be in
the spotlight again?