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Ninth consecutive increase from the Bank of England

Rates raised by another 50 bps in the UK

15 December 2022

Another central bank meeting and another rate hike. This time from the Bank of England, which raised rates by 50 basis points (bps) to 3.5%, as predicted by markets. This is now the ninth consecutive increase in rates in the UK although noticeable that there were split views in the committee with a majority of six voting for 50 bps, while one member voted for a more aggressive 75 bps and two members opted for no change. This helps explain sterling’s weak reaction to the hike. With the accompanying statement noting that the employment market remains tight with continuing wage inflation pressures, this might seem as hawkish as the Fed yesterday – but with a growingly discordant committee, future hikes continuing at subsequent meetings might not seem as obvious even if inflationary pressures should continue to direct central bank actions.

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Charles Hepworth

Investment Director
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