Market pricing on Thursday shows investors do not fully price a 25bp Bank of
England hike until the MPC meeting in February next year. LSEG data show
cumulative tightening priced by the Dec. 17 decision is 24.3bp, versus 36bp
priced by the Feb. 4 decision. Pricing for the Sept. meeting implies under 4bp
of tightening, equating to roughly a 15% chance of a hike; by comparison markets
price about 24bp at the ECB’s Sept. meeting. UK July CPI rose to 2.9% on higher
household energy bills, while the labor market remains moderate — the primary
source of longer‑run inflation concern among MPC members.
