Bank of England Decision Due: Another 50-Bp Rate Hike or 25-Bp?

The video discusses the potential for rate hikes by the Bank of England (BOE), considering factors like high wage growth and inflation. It explores the possibility of a 25 basis points increase due to declining CPI and economic weakening, but also considers a 50 basis points hike due to wage growth and inflation composition. The impact of new MPC member Megan Greene on vote dynamics is analyzed, with her hawkish stance potentially influencing decisions. Updated forecasts suggest a high rate path, with a peak of 6%, raising concerns about a recession, though it may not be deep by historical standards.

What are the main factors influencing the BOE's decision on rate hikes?

• High GDP growth and low unemployment

• CPI decrease, unemployment rise, and economic stagnation

• CPI increase and economic growth

• Stable inflation and wage growth

What is the significance of Megan Greene's appointment to the MPC?

• She is expected to bring more unanimity to the MPC

• She will focus solely on inflation control

• She will likely oppose any rate hikes

• She has no influence on the MPC's decisions

How might Megan Greene's views impact the MPC's decision on rate hikes?

• She is likely to vote against any rate hikes

• She may support a 50 basis points increase

• She will not participate in the voting

• She will only support a 25 basis points increase

What is the expected peak rate path according to the economic forecasts?

• 5%

• 4%

• 6%

• 7%

What is the predicted impact on GDP if the expected rate path is followed?

• A 2% increase in GDP

• No change in GDP

• A 1% fall in GDP

• A 3% fall in GDP