Bank of England

Pound Sterling's early gains melted away to leave behind widespread losses in what could remain volatile trade on Thursday following 'dovish' commentary from one Bank of England (BoE) official and amid what is increasingly banana republic style dysfunction in government and Westminster.

The Bank of England will not have to raise interest rates as high as previously feared following the recent interventions by the UK's new finance minister.

The UK economy shrank notably during August in an outcome that leaves GDP on course for a quarterly fall that would come sooner than many forecasters had anticipated and which could challenge the credibility of market-implied expectations for the Bank of England (BoE) Bank Rate.

The Bank of England's (BoE) plan to curtail its emergency intervention in the government bond market at the end of this week could deepen a pending recession and impair the credibility of UK institutions if it comes too soon for the pension fund sector to handle, according to Oxford Economics.

GBP was on Wednesday close to reclaiming overnight losses that followed comments from Bank of England governor Andrew Bailey that support for UK pension firms and long-term gilt markets would be withdrawn on Friday.

GBP continues to struggle in a dour global market environment but a disorderly retest of recent all-time lows is unlikely as the Bank of England sends a message to investors that it is vigilant to financial market stresses.

The British Pound saw heightened volatility on an announcement by the Bank of England it would intervene in the bond markets.

In an attempt to calm UK gilt markets, and a bruised Pound Sterling, Pill said the central bank was prepared to deliver a "significant policy response".

The British Pound reversed an earlier recovery against the Euro, Dollar and all other major currencies after the Bank of England said it was not prepared to intervene in the currency market.

The Bank of England must take the initiative and hike UK interest rates significantly if the decline in the British Pound is to be arrested, says a leading economic research consultancy.

The Bank of England raised Bank Rate by half a percentage point for a second time in September but warned that it could "respond forcefully" to anything that threatens to lift inflation further and since then there have been significant government policy announcements, some of which may matter to the BoE.

The Bank of England (BoE) lifted Bank Rate by half a percentage point for a second consecutive occasion in September in what may have been a surprise decision to anybody whose own expectations were guided by an oft-cited but also widely misunderstood Overnight Indexed Swap (OIS) market. 

The Bank of England raised interest rates by 50 basis points on Thursday, which was a smaller increment than the 75bp the market was expecting.

Some measures of UK inflation have continued to head in the wrong direction for the Bank of England (BoE) and in this context the details of its latest Inflation Attitudes Survey could be of significant concern to members of the Monetary Policy Committee (MPC) ahead of next Thursday's interest rate decision.

For GBP to remain supported the Bank might have to raise its basic interest rate to as high as 5% during this cycle according to new research.

The main UK inflation rate ebbed in August but core inflation reached a new high as price pressures broadened out across the economy, adding to the risk of the Bank of England (BoE) Monetary Policy Committee voting for something like its own modern day Charge of the Light Brigade in September.

The Bank of England must hike more than any other G10 central bank over the remainder of 2022 if it is to satisfy market expectations.

"The FX market is getting tired of waiting for the BoE to actually deliver something more hawkish." - HSBC's Dominic Bunning.

The Bank of England (BoE) won applause from within the Citigroup foreign exchange business on Friday for its upfront acknowledgement of the UK economic car crash in progress and simultaneous steely resolve to go on doing whatever is necessary to drive inflation back to the two percent target level.

The Bank of England's forecasts of a long and enduring UK recession has been branded unrealistic by Savvas Savouri, Chief Economist and Partner at hedge fund Toscafund Asset Management.