JPMorgan Chase & CoThe Bank of England is expected to raise interest rates ahead of time, saying the strength of the UK labour market could prompt the central bank to act in the second quarter of 2022.
Economist Allan Monks said the first rate hike of 15 basis points to 0.25% would come six months earlier than he had expected, after which the Bank of England would raise interest rates every six to nine months. He is in official data showing record wage increases andRelease the above expectations after the job vacancy.
"demand for net new jobs is strong, and this is in the face of labor shortages," Monks wrote in a report on Tuesday. The surge in employment "implies that most people who get rid of paid leave still stay with their existing employers or find new jobs," he said.
JPMorgan Chase & Co joins institutions such as Bank of America and HSBC in predicting that the Bank of England will raise interest rates by the middle of next year. This is more hawkish than most economists expect, and the median market expectation is that the Bank of England will sit tight until its November 2022 meeting.
The date of the first rate hike is crucial for the gilt market. The market is looking for signs that the Bank of England may stop investing in gilts when its current holdings mature. The Bank of England has said interest rates must rise to 0.5 per cent before such action can be taken.