The attitude that the BoE will take is the main attention! Will Rate Increases End?

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 The Bank of England is likely to raise interest rates again this week, possibly the last of a series of rate hikes as a slowing economy becomes a concern for policymakers.


Almost all of the 65 economists predicted that the BoE would raise Bank Rate to 5.5% on Thursday from 5.25%, which would be the highest level since 2007.


Financial markets were less certain with rate futures on Friday showing a 25% chance that interest rate hikes will be halted. Goldman Sachs and Citi also expect Thursday's decision to be the BoE's last rate hike.


Much of the data in the past week underscored Governor Andrew Bailey's comments this month that the BoE was "closer" to ending the cycle of rate hikes.



Economic output in July fell more sharply than expected and the unemployment rate has exceeded BoE forecasts for the third quarter as a whole. The European Central Bank also cited the weak economic outlook when it raised interest rates last week and signaled that it would be the last step in the current cycle.


Inflation figures for August due on Wednesday are likely to buck the downward trend due to rising petrol prices. Investors will be wary of the BoE's tendency under Bailey to act decisively on higher expected inflation data.


Benjamin Nabarro, Citi's chief economist, said last week's speech from the MPC's most hawkish member, Catherine Mann, in which she warned of a hold on interest rates might offer an early clue.


The BoE will also inform investors of plans to issue a large stash of British government bonds in the coming year.

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