Reuters Poll: Bank of England to raise rates in late 2022, possibly sooner

80% of respondents backed the sooner rate hike from the Bank of England (BOE) during the September 6-9 Reuters poll.

“The Bank of England will raise borrowing costs by end-2022, earlier than previously thought, and there is a chance it comes even sooner as a solid economic recovery from the pandemic and high inflation may tip its hand,” revealed the survey.

The poll also mentioned that the bank rate was seen rising to 0.25% in the fourth quarter of 2022 from its current record low of 0.10%, versus the August poll showing no change.

In a separate poll, Reuters also stated, “Such a move would put the BoE ahead of the U.S. Federal Reserve, which is not forecast to raise interest rates until 2023, although the Fed is expected to announce a plan to taper its asset purchases this month.”

Market implications

GBP/USD is in the recovery mode of late and hence positive scenarios for the BOE rate hike could add strength to the upside momentum. However, the cable traders paid a little heed to the poll results while taking rounds to 1.3835 during early Friday.

Read: GBP/USD Price Analysis: Bulls eye the psychological 1.40 level