BoE hiked; US jobless claims add downside risk to NFP

BoE left the door open to further 50 bp steps. It also warned that inflation pressures have intensified and are expected to rise to just over 13% in 2022 and “to remain at very elevated levels throughout much of 2023, before falling to the 2% target two years ahead”. Additional 50 bp moves are not ruled out then. The statement also flagged that the MPC is “provisionally minded to commence gilt sales shortly after its September meeting”.

US initial jobless claims edged up 6k to 260k in the week ended July 30, holding elevated levels and above 200k since mid-May.  EGBs are rallying after shrugging off the BoE’s 50 bp rate hike and the renewed commitment to act “forcefully” on inflation risks if needed. Stock markets meanwhile are posting broad gains across Europe and the FTSE 100, which moved sideways going into the BoE announcement, is now up 0.4%, while the DAX has held on to a better than 1% gain.



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Stuart Cowell

Head Market Analyst

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