The Bank of England could still deliver an unexpected interest rate increase, according to a UK markets briefing from Morningstar published Monday. The same briefing notes that Amazon has joined what it describes as a bond boom.
Morningstar's assessment follows reporting from other outlets pointing to shifting expectations around UK monetary policy. The Financial Times reported that a surge in oil prices has revived the prospect of a Bank of England rate rise this year. The Times said the central bank faces a crucial rate decision following a bond sell-off.
Against that backdrop, several outlets expect the Bank of England to leave its key rate unchanged at the upcoming meeting. The Wall Street Journal reported that the Bank is expected to hold its key rate and slow the pace of quantitative tightening. Reuters likewise reported that the Bank of England is set to hold rates steady and slow QT.
The two threads in Morningstar's briefing — the possibility of a rate hike and Amazon's bond market activity — reflect a week in which UK rate expectations and corporate borrowing are both in focus. Morningstar frames a hike as a remaining possibility rather than a baseline expectation, and its summary does not specify what kind of bond issuance Amazon is undertaking.
Investors will watch the Bank of England's rate decision and any adjustment to its quantitative tightening plans, along with details of Amazon's bond sale.
