<ul><li style=““ class=“text-align-justify“>The justification for tighter policy is clear</li><li style=““ class=“text-align-justify“>Whether interest rates have to rise by as much as currently priced in financial markets remains to be seen</li><li style=““ class=“text-align-justify“><a target=“_blank“ href=“https://www.bankofengland.co.uk/-/media/boe/files/speech/2022/october/the-inflationary-consequences-of-real-shocksspeech-by-ben-broadbent.pdf?la=en&hash=40EE6F0A7FE902A87B1349A71B04FF37A2D62C74″ target=“_blank“ rel=“nofollow“>Full comments</a></li></ul><p style=““ class=“text-align-justify“>There’s a slight pullback on market pricing for the BOE after his comments but nothing too material. After all, the immediate outlook remains the more important one here and a 75 bps rate hike is fully priced in going into the 3 November policy decision. OIS swaps show that a 100 bps rate move is now seen roughly at 15%, down from 25% earlier.</p><p style=““ class=“text-align-justify“>As for his headline comment, he’s talking about when the bank rate moves to somewhere around 5.25% and how that will result in a cummulative drag of GDP by almost 5% under the entire tightening cycle. As if the central bank will keep tightening when the economy is in such utter shambles. Pfft.</p><p style=““ class=“text-align-justify“>/<a target=“_blank“ href=“https://www.forexlive.com/terms/g/gbp/“ target=“_blank“ id=“3a5ab7c1-ff09-45ea-87d4-eea6613bb754_1″ class=“terms__main-term“>GBP</a></p>

This article was written by Justin Low at forexlive.com.