CME, which uses its MPC SONIA futures prices to determine market expectations for the BoE’s monetary policy, said the bank is likely to hike rates at its December 16 policy meeting. There is only a 27.7% chance that there will be no change by the end of the year while markets are pricing in no prospect of further easing.
Erik Norland, Senior Economist at CME Group, said, “The SONIA futures markets are currently pricing in that the BoE will be the first of the major central banks to hike rates after the pandemic with a 21% chance it will November and a 72% chance they’ll have moved to higher rates by December.
“These assessments are likely to depend on other strong data pointing to economic growth, a tight labor market and rising inflation.”
The data comes two weeks after BoE Governor Andrew Bailey announced in a speech to the Society of Professional Economists that the bank was ready to hike rates before the end of the year if inflation continues to rise.