Mark Carney

  • Bank of England set to announce its latest policy decisions at 12.00 p.m. GMT (7.00 a.m. ET).
  • Britain’s central bank widely expected to leave policy unchanged after raising interest rates at its last meeting in November.
  • Markets will be looking for signals from the BoE about the future path of rates.

LONDON — The Bank of England will shortly announce the decisions made during the December meeting of its key monetary policy meeting.

After raising interest rates for the first time in more than a decade in November, the Old Lady of Threadneedle Street is set for a quiet month, and isn’t expected to make any changes at all to its key policies. That means leaving interest rates at 0.5% and keeping the £435 billion cap on QE in place.

That isn’t to say the announcement, which will come at 12.00 p.m. GMT (7.00 a.m. ET) will be a total non-event, and the markets will be keeping a close eye on any clues from the bank about the future path of interest rates.

“The key thing to watch out for in the accompanying statement will be whether the MPC flags that the market is not pricing in enough in the way of monetary tightening in coming months,” David Owen, chief European economist at investment bank Jefferies said in an email on Wednesday.

At its November meeting, the bank hinted that the path of interest rates could steepen somewhat in the coming year or so, signalling the potential for another rate hike in early 2018, and possibly even another towards the end of the year, should the economy remain reasonably robust.

However, in speeches by MPC members since the vote, it has been made abundantly clear that interest rates could move in either direction going forward, largely depending on how the UK’s Brexit negotiations progress, and how those negotiations impact the British economy.

Some commentators believe, that following a higher than expected inflation reading earlier in the week (3.1% compared to the 3% expected) the MPC could take a slightly more hawkish tone, especially given that wages also showed some pick-up during the most recent data period.

This post will be updated after the Bank of England’s decisions are announced.

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