On Thursday, the BOE will meet in a fraught atmosphere that could see some market shakeups. The UK economy is in recession and it makes it difficult for central banks to combat inflation. The target rate has been exceeded five times by the rise in consumer prices.
Due to the extraordinary circumstances, there has been a growing divide within the BOE about how to handle the situation. In the wake of the meeting, traders will be focusing on this split. The number of votes can tell traders where they expect policy to take place over the coming weeks.
Two roads split in a yellow wood
The BOE has two options, so much attention is placed on which of them will be chosen. For now, the one most anticipated, due to the fact that it received the most votes in recent meetings is to continue tightening policies. It could worsen the current recessionary environment. This could lead to a stronger pound for traders in the near future. The BOE could hike by 50bps or more at the next meeting.
The minority is for rescuing the economy immediately, arguing that inflation is…
