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London - If economists are to believed, November could be the last live Bank of England (BoE) meeting for quite some time.
The UK’s first interest-rate increase in over a decade will take place at the November 2 announcement, according to 76% of those surveyed by Bloomberg, up from 22% of respondents in September. But the economists don’t see another hike until the first quarter of 2019, with a further 25 basis-point tightening coming later that year - beyond Governor Mark Carney’s scheduled departure date in June.
That predicted path is at odds with the market’s view. While money-market traders are pricing in an 87% chance of the Monetary Policy Committee lifting rates from a record-low 0.25% next month, they are fully pricing in another hike by August 2018.
Policy makers will receive a slew of new evidence to inform their decision this week, starting with the latest inflation data at 10:30. That report, forecast to show consumer prices rose at their fastest annual pace in five years in September, will be followed by wage and retail sales data.
Carney will also have the opportunity to refine his policy message when he testifies before lawmakers in London later today. In comments last week, he stuck to the MPC’s line that a rate increase would be appropriate in the “coming months,” but declined to be any more specific on the exact timing.
The latest Bloomberg survey also showed economists see the economy growing 1.5% this year and 1.3% in 2018. That’s unchanged from the predictions in September.
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