Omicron Risk Suggests BOE Could Defer Hike

(Bloomberg) -- The emergence of the omicron variant and the government’s decision to tighten restrictions have significantly lowered the chances that the Bank of England raises interest rates this month, according to Bloomberg Economics. Even the most hawkish member of the Monetary Policy Committee, Michael Saunders, suggested there could be value in waiting for more information on the new strain before changing policy. While a hike cannot be completely ruled out -- financial markets see around a 40% chance of borrowing costs are increased -- the November meeting demonstrated that the MPC isn’t willing to move when risks that carry high impact, however unlikely, loom on the horizon.

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