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Yield curves are super flat now, markets really aren't pricing a hike.

https://www.bankofengland.co.uk/statistics/yield-curves

https://www.theguardian.com/business/2023/jul/05/interest-rates-jp-morgan-economists-uk-inflation

Stubborn UK inflation may lead to 7% interest rates, economists warn

JP Morgan says risk of ‘hard landing’ for economy heightened, with higher borrowing costs hitting business

@Noit bet on stubborn inflation here!

Oof

Amazing to see that this market has gone from 4% to 78% in less than a month!

I’ve added a market on whether rates will hit 6%:

https://www.cityam.com/bank-of-england-to-hoist-interest-rates-to-5-75-per-cent-as-experts-warn-uk-inflation-is-out-of-control/

@Noit The futures markets don't seem to give much time resolution. When is that peak priced for? To get to 5.5% in 2023 would require hikes at 4 of the remaining 5 meetings of the year. 3 hikes and two holds and this market resolves NO, even if there is a subsequent higher peak.

@chrisjbillington I think the most likely route to 5.5% would be if the inflation rate doesn’t come down and we see a rise in each of the next four meetings.

I’d be more surprised to see a stop-and-go approach getting us to 5.5%. If the situation with inflation is bad enough to need to raise rates that high then I don’t think they’ll want to seem weak by skipping a session.

I could be wrong though - it’ll be interesting to find out!

@SimonGrayson Update: 5.75% would be predicted for early 2024. 5.5% potentially around November but does make me wonder if I have been too bullish here.

https://twitter.com/EdConwaySky/status/1668987423643119623