Articles and Whitepapers

Nothing to see here? There were few surprises from the Bank of England last Thursday with both the decision to hold rates at 4%, along with the 7-2 vote split (Dhingra and Taylor voting for a 25bp cut) widely anticipated.

The Bank of England were not expected to move policy rates at today’s meeting so the focus for markets was on the updated quarterly forecasts for growth and inflation along with the accompanying minutes of the two-day policy meeting.

The Bank of England raised base rates by 25bp to 5.25% at yesterdays meeting, in line with a recently revised consensus which had been broadly split between 25bp or 50bp prior to the softer inflation and growth data over the past couple of weeks.

With unemployment at its lowest level for 50 years, inflation at a 40-year high and further interest rate rises on the horizon as the Bank of England celebrates 25 years of independence, we discuss the impact historically high levels of uncertainty is having upon the interest rate hedging process.

The successful start to the UK's vaccination programme is great news but the economic outlook remains highly uncertain so is it time for the Bank of England to take interest rates into negative territory?