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2026-11-05 21:00:34
[JPMorgan Private Bank: This Rate Hike is More About Maintaining Credibility than the Start of an Aggressive Cycle] ⑴ A global investment strategist at JPMorgan Private Bank stated that the UK's policy rate was already among the highest of developed economies at the beginning of the year. Coupled with fiscal tightening and labor market fragility, financial conditions were already putting on the brakes, which gave the Monetary Policy Committee room for observation and assessment. ⑵ The strategist stated that this room subsequently narrowed, inflationary pressures continued to accumulate, and growth was more resilient than expected. This raised questions about whether policy was truly restrictive, while calls for further rate hikes were rising. ⑶ They believe that today's action is more like a restrained measure to maintain credibility than the start of an aggressive cycle. ⑷ The strategist stated that while inflation is high, the evidence of its spread beyond energy sectors remains mixed. Further stabilization of energy prices will reinforce this judgment. Overall, more rate hikes may be needed, but the data needs to provide the necessary information first.
