BoE: Further tightening appears likely in June – UOB

Economist at UOB Group Lee Sue Ann comments on the upcoming monetary policy meeting by the BoE.

Key Takeaways

“Headline CPI inflation eased to 8.7% y/y in Apr, from 10.1% y/y in Mar. The reading was above estimates of 8.2% y/y. Core CPI inflation, however, surprised on the upside, climbing 6.8% y/y from 6.2% y/y in Mar.”

“While the unemployment rate unexpectedly rose to 3.9% in the three months to Mar, as more people sought to get back into the jobs market; pay growth, which is at the heart of the Bank of England (BOE)’s debate about whether to raise rates further, remained strong by historical standards.”

“Taking into account the BOE’s guidance and the latest slew of economic data releases, we now look for a 25bps rate hike at the next BOE monetary policy meeting on 22 Jun.”