Research Briefing | Oct 19, 2021

UK | BoE looks to be headed for a policy mistake

UK | BoE looks to be headed for a policy mistake

Repeatedly hawkish comments from BoE Governor Bailey suggest that the MPC is preparing the ground for a rate rise. Consequently, we now forecast a 15bp hike in February and the policy rate to end 2022 at 0.5%.

What you will learn:

  • We think the rise in UK inflation is mainly due to global developments that monetary policy can’t influence.
  • We think tightening monetary policy now would be a mistake, albeit one with only a minor impact.
  • Even allowing for the hawkish rhetoric, we think expectations of a rate hike at the next meeting are too aggressive.

Back to Resource Hub

Related Services

Industrial property

Post

US: High debt costs suggest an industrial correction

The scale of the increases in debt costs, coupled with the low-yielding environment makes some repricing highly likely for gateway US industrial markets over the coming quarters.

Find Out More
Office building in London

Post

High debt costs suggest European office price correction

Our analysis suggests a 10% correction is needed on average for the major office markets in Europe to compensate for the higher cost of debt, with prime yields required to soften by 10bps-75bps to generate a low-risk interest coverage ratio at a reasonable LTV.

Find Out More