Bank of England Hikes Interest Rate

Note: This section contains information in English only.
Source: Dukascopy Bank SA
At 12:00 GMT on Thursday, March 17, the Bank of England hiked its Official Bank Rate by 0.25%, increasing rates to 0.75%. The bank also published its Monetary Policy Summary.

Quoting the statement: "The MPC sets monetary policy to meet the 2% inflation target, and in a way that helps to sustain growth and employment. At its meeting ending on 16 March 2022, the MPC voted by a majority of 8-1 to increase Bank Rate by 0.25 percentage points, to 0.75%. One member preferred to maintain Bank Rate at 0.5%.

In the MPC's central projections in the February Monetary Policy Report, published before Russia's invasion of Ukraine, UK GDP growth was expected to slow to subdued rates during the course of this year. This in large part reflected the adverse impact of the previous, already large, increases in global energy and tradable goods prices on UK real aggregate income and spending. As a result, a margin of spare capacity was projected to open up and the unemployment rate to rise to 5% by 2025. CPI inflation was expected to peak at around 7¼% in April 2022. Upward pressures on inflation were expected to dissipate over time and, conditioned on the rising market-implied path for Bank Rate expected at the time of the February Report and the MPC's current forecasting convention for future energy prices, CPI inflation was projected to fall back to a little above the 2% target in two years' time and to below the target by a greater margin in three years.

Twelve-month CPI inflation rose from 5.4% in December to 5.5% in January, which triggered the exchange of open letters between the Governor and the Chancellor of the Exchequer that is being published alongside this monetary policy announcement. Inflation is expected to increase further in coming months, to around 8% in 2022 Q2, and perhaps even higher later this year."

Released Document

Monetary Policy Summary, March 2022

The GBP/USD currency exchange rate reacted by plummeting in ten minutes by more than 100 base points or 0.80%.

On a larger scale, the rate has bounced off the resistance of the 1.3200 mark and could once again approach the 1.3000 mark.

Initial Reaction

Larger scale situation

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Actual Topics

Thu, 17 Mar 2022 15:36:33 GMT

21.03.-25.03. UK CPI and Swiss Policy Rate

The top events during the week will be the UK CPI, the German PMIs and the Swiss National Bank Policy Rate and Monetary Policy Assessment release. On Wednesday, the weeks notable events will start at 07:00 GMT, as the UK Consumer Price Index is set to be published. Later on, on the same day, note the US weekly crude oil inventory

Wed, 16 Mar 2022 18:16:48 GMT

Federal Reserve Hikes Interest Rate

On Wednesday, March 16, the US Federal Reserve issued a monetary policy statement and hiked interest rates. The central bank hiked interest rates, as forecast by the markets by only 25 base points. In addition, the bank revealed that it would reduce its balance sheet at one of the upcoming meetings. Quoting the statement: "Indicators of economic activity and employment have

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