Some investors expect the Bank of England to decide on an expansion of its current £80 billion-a-month quantitative tightening program in its decision tonight, but analysts at Jefferies Group said the announcement was more likely to come in September.
“We do expect the MPC to discuss the pace of quantitative tightening, but expect any decision to be taken in September,” said Mohit Kumar, chief European financial economist at Jefferies.
Like most others, Jefferies expects the Bank of England to raise rates by 25 basis points, although money markets are pricing in a 50 basis point hike as quite likely.
“Inflation slowed last month and this month we should see inflation move lower again, which should give the BoE an excuse to slow down the pace of rate hikes.”
