As expected, a 25 basis point rate hike, Bailey seems inclined to end the rate hiking cycle as soon as possible

　　The Bank of England (BoE) raised its policy interest rate by 25 basis points as expected, to 4.5%, the highest level since 2008. The voting result of the Monetary Policy Committee (MPC) is 7-2. Subsequently, Bank of England Governor Andrew Bailey stated that further interest rate hikes may be needed to curb inflation.

　　He said, "Low and stable inflation is the foundation for the healthy operation of the economy. We must persist until the end to ensure that inflation falls back to the target of 2%

　　He particularly pointed out, "The food inflation rate is particularly high, reaching 19.1% in March, the highest level since 1977. There are some signs that food inflation will soon begin to weaken, but it will still take longer than we previously thought

　　At the end of the press conference, Bailey said in an interview with Bloomberg Television that as long as he saw evidence of Disinflation, the cycle of interest rate increase might end. He said, "We are approaching a point where, in a sense, we can stop and rest. But we haven't seen any evidence to strongly suggest that we have reached this point

　　After the announcement of the decision, the yield of sterling against the US dollar and Gilt-edged securities bonds rose year on year. The Overnight Index Swap (OIS) quotation shows that the policy interest rate for September was 4.95%, while the top 4.90% has been announced.

　　The pound pared losses after the decision, and Gilt-edged securities gave back its gains. Money market traders have increased their bets on terminal interest rates, pricing at 4.95% in September, compared to 4.90% before the decision.

　　Economists Dan Hansen and Anna Andrade from Bloomberg Economics say: The Bank of England has maintained its policy guidance unchanged, indicating its unwillingness to signal a pause in interest rate hikes. Although recent strong inflation data has reduced the likelihood of further upward growth in the coming months, we still believe that wages and core inflation may continue to be strong, which makes us satisfied with our expectation of the final rate hike in June

　　Michael Bell, global market strategist at JPMorgan Asset Management, said, "I think they should pause now. If they need to complete their work, they can raise interest rates further in the future. Continuing to raise interest rates until we see the impact of tightening policies may go too far, causing more damage to the economy than needed to curb inflation

　　Valentin Marinov, head of foreign exchange strategy at Crédit Agricole, said: "Even considering that we saw two negative votes from MCP, the outcome of this meeting is more hawkish than we expected."

　　Ed Hutchins, head of interest rates at Aviva Investors, said: "In the long run, given the economic losses caused by further tightening policies, the pound may become vulnerable. The more the Bank of England raises interest rates, the greater and faster the future rate cuts will be. This should lead to a weakening of the pound in the medium term