Bank of England: ABC: Alert, but careful?

Governor Bailey signalled earlier this month that the Bank was “not going to rush to judgments,” and the April decision duly reflected that stance. The MPC held Bank Rate at 3.75%, leaning on the view that weak domestic activity will curb second‑round inflation pressures from higher global energy prices. In the press conference, Bailey underscored the unusually high uncertainty facing policymakers, prompting markets to scale back expectations for near‑term tightening. We think there is further room for that repricing. We expect just one 25bp hike this year, well below the 63bp of tightening currently priced by markets.