🏦🇬🇧GBP OIS Curve, BoE Ahead

**As seen in Macro Walk report 01/30/2022, subscribe at cablefxm.co.uk/reports

• Heading into Bank of England monetary policy decision, overnight index swaps priced an 80% chance of a rate hike as of Friday close. This has increased to 99% as of time of writing, the rest of the year looks 'live' as meetings hold an above 50% chance of a hike until August. This would leave the central bank's key rate at 0.5% and total 35bps of tightening since the December surprise hike. The market expects a total of 5 hikes in the Bank Rate by December or 1.5%. We will be listening to the bank's statement and the potential divergence as the ECB presser will be held a couple of hours later

• I would like to remind you that these expectations were wrong-footed last year as inflation increased in the U.K. and BoE's Bailey signaled a move during the Fall. However, with the Fed hiking rates in March and U.K. inflation above 3.4% from the central bank's target, a hike and a decision to halt bond reinvestment are likely.