50bp hike... for today at least
Commenting on The Bank of England interest rate, Melanie Baker, senior economist at Royal London Asset Management said:
“The Committee want to wait until November to fully digest the impact of fiscal changes. The pace of rate increases might plausibly step up then, depending what else is happening in the economy and especially to measures of domestically-driven inflation. Three MPC members did vote for a 75bp rate hike today.
“The decision to raise rates was clearly about inflation. They noted signs of continuing strength in domestically generated inflation and suggested that the energy bill freeze would add to inflationary pressure in the medium term.
“My forecasts assume that this is not the last BoE rate hike in this cycle by any means, with a peak around 3.50% next year and risks skewed to the upside of that projection.”
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Established in 1988, Royal London Asset Management (RLAM) is one of the UK's leading fund management companies, providing investment management solutions to both wholesale and institutional clients such as not-for-profit organisations, local authorities and the insurance sector.
RLAM manages £150 billion of assets as at 30 June 2022. It invests in all major asset classes including UK and overseas equities, government bonds, investment grade and high yield corporate bonds, property and cash.
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Issued August 2022 by Royal London Asset Management Limited, registered in England and Wales number 2244297; authorised and regulated by the Financial Conduct Authority. Registered Office: 55 Gracechurch Street, London, EC3V 0RL.
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