Bank of England rate hike pause back on the table after inflation surprise

1 yıl önce

In August, the Bank of England increased interest rates for the 14th time in a row.

Alexander Spatari | Moment | Getty Images

LONDON â The Bank of England's next monetary policy move is now wide open, following a significant downside surprise in the August inflation print out earlier on Wednesday.

Prior to the August consumer price index reading, the market was pricing in an 80% chance that the central bank would hike interest rates by 25 basis points on Thursday to 5.5% â the highest level since December 2007.

Market pricing swung drastically after the annual headline CPI print fell to 6.7% in August from the 6.8% of July, defying a consensus forecast that it would rise to 7%.

Shortly after 10 a.m. London time, the probability that the Bank will hold rates steady at 5.25% had risen from 20% to almost 55%, according to LSEG swaps data.

Notably, core CPI â which excludes volatile food, energy, alcohol and tobacco prices â came in at 6.2% in the 12 months to the end of August, down from 6.9% in July.

This is a breaking news story and will be updated shortly.