Bank of America Global Research discusses its expectations for the BoE August policy meeting on Thursday.
"We expect the Bank of England (BoE) to respond to higher peak inflation, and therefore greater risks of inflation expectations and wages remaining high, with faster hikes. We look for 100bp of hikes by November, 25bp more than previously. We assume the BoE hikes 50bp this week although the BoE could still choose 25bp and all but announcing active QT as a substitute, in our view," BofA notes.
"We assume a 7-2 vote in favor of a 50bp hike. But we see risks skewed towards a unanimous vote for 50bp hikes. We would expect the BoE to remove its guidance towards future more forceful responses. This meeting would be sold as a one-off re-calibration rather than the start of a series of 50bp hikes we think. We expect the BoE to all but announce the start of active QT, to begin after the September policy meeting," BofA adds.