What an interest rate hike in February would mean for markets

Rate rise could bring end to QE

clock • 4 min read
Another interest rate hike expected in February
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Another interest rate hike expected in February

With the UK’s current interest rate at 25bp, brought in amid uncertainty in December, the market is already pricing in a further raise as soon as February, which could formally bring about an end to the UK’s quantitative easing programme while making the Bank of England ‘credible’ again from a communications perspective.

Craig Inches, head of rates and cash at Royal London Asset Management, highlighted that the market is currently 80% priced for a UK interest rate hike to 0.5% in February. Driving forces behind another...

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