- 43 of 56 economists say the BOE will raise the bank rate by 50 bps in December
- 13 of 56 economists say the BOE will raise the bank rate by 75 bps in December
- The terminal rate forecast by the poll is at 4.25% – similar to the November poll
- 15 economists say risk to terminal rate forecast would be “later and higher than expected”
- 7 economists say risk to terminal rate forecast would be “earlier and lower than expected”
- Median response of 90% when asked about probability of a recession in the next year
Given surging inflation pressures, the BOE will continue to feel badgered into tightening monetary policy further for the time being. There was already some pushback by Bailey & co. in the November policy meeting, hinting that the terminal rate would be at “a lower peak than 5.20% priced into markets”.
In other words, they are already angling towards a slower pace of tightening and with a prolonged recession on the cards, they might just be the first major central bank to pause rate hikes.