- The Bank of England is expected to hold its Bank Rate at 3.75% on Sept. 17, with markets pricing an 80%+ chance of no change, per LSEG data.
- UK CPI inflation rose to 3.1% in August, the first reading above 3% since March, driven by motor fuel costs up 23% year-on-year.
- The Fed hiked by 25 basis points on Sept. 16, its first hike since 2023; the ECB delivered its second hike this year and the BOJ is expected to hike on Sept. 18.
- Long-dated gilt yields are approaching 6%, the highest borrowing costs in the G7, and the BoE will announce plans to stop selling 20- and 30-year gilts.
- A November BoE hike of at least 25 basis points is widely anticipated.
Quotes
“The U.S.-Iran conflict began over six months ago but higher energy costs are still filtering through to business input prices and household spending”
“the absence of any materially hawkish surprises in both this week's U.K. labor market and inflation data had been "enough for pricing for [hikes at] this upcoming meeting to fall back again.”