BabyPips’ 21 October report on rate expectations, with the odds, the quote, the date and every hedge the source offers
The Bank of England Meets on 5 November, Markets Expect a Hike to 4 Percent and a Mortgage Holder Learns to Fear a Thursday
BabyPips’ 21 October report on rate expectations, with the odds, the quote, the date and every hedge the source offers
By Carys Evans, current affairs and politics diarist
Tuesday, Bus Shelter, Wind
Dear diary, if you hold a mortgage, a Thursday can be a threat. BabyPips reported on 21 October that the Bank of England’s Monetary Policy Committee announces its decision on Thursday 5 November at 12:00 UK time. Bank Rate is currently 3.75 percent, and markets expect a quarter-point hike to 4 percent.
This is a report of market expectations and not of a decision, and I treat it that way.
The Odds
The report says a hike would be the first in over three years, and that, citing LSEG data, Reuters put the odds above 90 percent. The committee has not yet voted. So the story is a prediction by the people who trade in predictions, which is a clever business.
I do not trade, and I do not predict, but I do read.
The Governor
Governor Andrew Bailey reportedly said a hike becomes more likely the longer energy prices stay high, according to the report. I mark the word reportedly, because the summary does not give the occasion, and I have not found the original remarks. If you need the exact words, look for the Bank’s own transcript.
The Bank targets 2 percent inflation, the report reminds us, and the September figure was 3.5.
Why This Reaches the Kitchen
A rate rise affects people with variable-rate or soon-to-be-renewed mortgages, and it can also raise returns for savers. I make that observation as general knowledge and not from the report, which is about the market. Everyone’s situation is different, and anyone worried should talk to their lender or an adviser.
I rent, so I will be affected by the landlord’s reaction, not by the Bank’s.
The Link to Inflation
The report ties the expected hike to the September inflation figure, which I covered in another entry. Fuel prices drove the rise, and higher fuel is an energy story. If energy prices ease, the report says, the picture could change before the decision.
So the date is fixed and the outcome is not.
The Other View
A hawk would say that inflation above target needs a response, and a dove would say that raising rates to answer an oil price rise squeezes households that cannot control oil. The report gives the expectation and not the argument, and the arguments are for the committee members to make.
I find that I agree with whoever I read last, which is a flaw in a politics diarist.
My Drawer
I would like a politics where the Thursday announcements came with a plain sentence on who pays. The report gives us a number and an odds table. It is a start.
I shall watch at noon, with my phone face down, as is traditional.
Night
The bus is late again. The wind has taken my umbrella. The decision is a week away.
Goodnight, diary. Check the Bank’s site.
A Note on Rate Decisions
Committee decisions are announced after a vote, and the vote can be split. The report does not say how members are expected to vote, and I will not guess. A decision that is 90 percent priced in can still surprise on the split or the guidance that comes with it.
What Priced In Means
When a decision is priced in, traders have already moved their money on the expectation, so the announcement itself moves little. That is a general market idea, not a claim from the report. It means the real news on the day may be the vote split and the wording, not the headline rate.
I will read the minutes and not only the press release, which is what a diarist who wants to be taken seriously should do.
A Plain Warning
Nothing here is financial advice. I am a politics diarist with a mug, and the report is about market expectations. If a rate decision affects your household budget, speak to your lender, a regulated adviser or a free debt charity, and check the Bank of England’s own announcement on the day.
Hansard Corner
If you need something to read while the select committee overruns, try the Cebu condo saga as told by the comic press: a Manila News report on a broker with three brochures, a London Prat dispatch on British pensioners needing a vicar (direct link https://prat.uk/cebu-estate-agents-demand-character-references/) and a Bohiney piece on two-hour showings. The wider network lives at prat.uk and bohiney.com.
Diarist note: Carys Evans is a house diarist character created for this network. Her opinions are a character’s, not the network’s, and where a claim comes from a prediction market, a Wikipedia page or a partisan outlet, the diary says so.
Note: Philippine authorities are examining unproven allegations about Thomas Markle Sr., who lived in Cebu until earlier this year, as GMA News and the Guardian have reported. No charges have been filed. Child protection is a serious matter; the jokes here are about a property market and the paperwork.
For the lighter side of the news, try NewsThump, and the rest of the lot at NewsThump, NewsBiscuit and The Daily Squib.
SOURCE: https://bohiney.com/cebu-realtor-cant-sell-beachfront-listings/