{"id":46917,"date":"2023-06-22T12:25:00","date_gmt":"2023-06-22T11:25:00","guid":{"rendered":"https:\/\/youtrading.com\/en\/?p=46917"},"modified":"2023-06-22T21:11:03","modified_gmt":"2023-06-22T20:11:03","slug":"midday-brief-boe-shock","status":"publish","type":"post","link":"https:\/\/youtrading.com\/en\/midday-brief-boe-shock\/","title":{"rendered":"Midday Brief – BoE Shock"},"content":{"rendered":"\t\t
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The British pound<\/a> failed to react and the FTSE100<\/a> tanked as the Bank of England raised its policy interest rate by 50 basis points to 5.0% during its June meeting, marking the 13th consecutive hike.<\/p>

This decision seriously surprised market expectations of a smaller 25 basis point rate hike and pushed borrowing costs to their highest level since the 2008 financial crisis, all in an effort to combat persistent inflation.<\/p>

Policymakers have also pledged to deliver further rate hikes if the ongoing inflationary pressures persist. Latest data revealed that British inflation unexpectedly held steady at 8.7% in the year to May.<\/p>

The market reaction in UK stocks, especially homebuilders, was bad as it went well beyond predictions of a modest decline to 8.4% and remaining significantly above the central bank’s target of 2%.<\/p>

Furthermore, the core inflation rate accelerated to a 31-year high of 7.1% this week, which may have prompted the central bank to take more drastic action during the summer months.<\/p>

The Bank of England initiated the rate hikes nearly a year and a half ago, making it the first major central bank to take such action and resulting in the fastest policy tightening in over 30 years.<\/p>

The guidance and statement details don’t reflect much of a change to before, which suggests that the central bank is still on the tightening path.<\/p>

Traders had been pricing in either a 50 bps move for today or August so it’s good to have this out of the way now. The peak rate in terms of OIS pricing remains close to the 6% mark (now 6.05%), just a touch higher than the 5.93% priced in ahead of the decision.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

The British pound failed to react and the FTSE100 tanked as the Bank of England raised its policy interest rate by 50 basis points to 5.0% during its June meeting, marking the 13th consecutive hike. This decision seriously surprised market expectations of a smaller 25 basis point rate hike and pushed borrowing costs to their […]<\/p>\n","protected":false},"author":4,"featured_media":33109,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[2],"tags":[56,57,102,75],"yoast_head":"\nMidday Brief - BoE Shock - Youtrading UK<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/youtrading.com\/en\/midday-brief-boe-shock\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Midday Brief - BoE Shock Midday Brief - BoE Shock\" \/>\n<meta property=\"og:description\" content=\"The British pound failed to react and the FTSE100 tanked as the Bank of England raised its policy interest rate by 50 basis points to 5.0% during its June meeting, marking the 13th consecutive hike.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/youtrading.com\/en\/midday-brief-boe-shock\/\" \/>\n<meta property=\"og:site_name\" content=\"Youtrading UK\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/YouTradingEnglish\/\" \/>\n<meta property=\"article:published_time\" content=\"2023-06-22T11:25:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-06-22T20:11:03+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/youtrading.com\/en\/wp-content\/uploads\/2022\/08\/gettyimages-174735102.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"400\" \/>\n\t<meta property=\"og:image:height\" content=\"258\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Nathan Batchelor\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Midday Brief - 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