BNP Paribas is expecting that the Bank of England is to raise UK interest rate hikes by 0.25%. And that too by next month. This is early when compared to the early forecast in May.
The bank‘s chief European economist Paul Hollingsworth said in a research note that with the Covid backdrop improving and inflation continuing to surprise to the upside, they now expect the Bank of England to raise interest rates by 0.25%. And that too on 3 February.
In doing so, the BoE would kick start the process of balance sheet reduction. Hollingsworth also added that however, the BoE was still likely to deliver a more gradual pace of rate hikes than is currently priced into markets.