Bank of England: Could Carney Spring a Surprise?

Remember, remember, the fifth of November, the old rhyme about the U.K.’s Bonfire Night goes. This year, the anniversary of the Gunpowder Plot, an abortive plan to blow up Parliament by disgruntled Catholics, comes with potential fireworks from an unlikely source – the Bank of England.

The second-ever of the Bank’s so-called Super Thursdays (where the interest rate decision and inflation report are released at the same time) is more likely to be a damp squib.

The bank is not expected to raise interest rates until February 2016 at the earliest, with some economists predicting that the first rise in interest rates could come even later in the year. The base rate has been at 0.5 percent since March 2009, as part of the extraordinary measures produced by monetary policymakers aimed at limiting the impact of the credit crisis.

Yet some surprises could still emerge. A 7-2 split on the nine person Monetary Policy Committee (MPC) which sets interest rates, rather than the expected 8-1, would definitely move expectations of an interest rate hike. Martin Weale and Kirsten Forbes are believed to be the most likely members to join Ian McCafferty in voting to raise rates slightly.


Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.