The Bank of England wants to end the tightening cycle sooner rather than later, but must raise rates in September

　　As the outlook for the UK (GBR) economy has become clearer, policymakers at the Bank of England (BoE) have become clearer about their policy options for the next step.

　　Bank of England Governor Andrew Bailey and chief economist Hugh Peel said they were weighing when to halt the most aggressive tightening cycle in more than 30 years. Another policymaker, Catherine Mann, said she would vote for more rate hikes.

　　The comments suggest that participants on the nine-member Monetary Policy Committee (MPC) are more willing to speak out in the face of stubbornly high inflation and a sharp slowdown in the economy.

　　Most market participants expect the central bank to raise rates by 25 basis points at its Sept. 21 meeting, taking the policy rate to 5.50 percent. But in recent weeks, with those comments and the release of major new economic indicators, the market's doubts have grown. At press time, market pricing indicated that the probability of a September rate hike had fallen to just over 50%.

　　James Smith, developed markets economist at ING, said: "We've now had a couple of comments that individually don't necessarily send a particularly strong signal, but I think this is when you add them all together. Overall, I think they are trying to lay the groundwork for agreeing to raise rates."

　　Andrew Goodwin, chief UK economist at Oxford Economics, said: "So far, rate-setters have been quite happy to opt for ambiguity in their communications. This ambiguity may be an attempt to avoid sending too firm a signal, only to be overturned by subsequent data."

　　Samuel Toombs, chief UK economist at Pantheon Macroeconomics, said: "The tightening cycle is not far from being over and will probably come after the September vote. Wage growth in July was too strong and likely to persist, which means the MPC cannot stop raising rates."