20 July 2022 - Bank plans hike and bond sales

Bank of England Governor Andrew Bailey, speaking at a dinner on Monday evening, gave the clearest indication yet of the Bank’s intention to hike interest rates by fifty basis points at its next meeting, which will take place on August 4th. This will be the biggest move in twenty-seven years, but Bailey is determined to show how serious he is in trying to bring inflation back to the Government’s two percent target. He believes that it is the absolute priority to bring it under control, and that this is the largest challenge since the Bank was granted independence by then Chancellor of the Exchequer, Gordon Brown. The bank is facing the same dilemma as the ECB and to a certain extent the FOMC. While raising rates will quell demand, which is the traditional manner in which Inflation is tackled, it is only in the supply side of the economy that headline inflation is being mostly seen. Beyond Currency Market Commentary: Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.