We expect the Bank of England to hike for the second time since the pandemic on Thursday, the first back-to-back rate hike since 2004. We expect the BoE to raise the Bank Rate to 0.50% from 0.25%. BoE Governor Andrew Bailey sounded concerned when he spoke a week ago emphasising that the tight labour market may imply upward pressure on wages and commodity prices remain high. It is important to keep in mind that the BoE, unlike e.g. the ECB, did not struggle with too low inflation ahead of the pandemic. Inflation expectations are also quite high, although the 1-year expectations in the YouGov/Citi survey declined in ... (full story)