The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookiesbefore using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Interest rates: Rate jitters stalk market

Uncertainty worldwide on the next move in interest rates is leading to short-term volatility and price gyrations in the foreign exchange market.

Traders say that in some cases perceptions are seemingly changing on almost a daily basis, as central bankers struggle to balance the need to cut rates to stimulate growth with the need to increase them to combat inflationary pressures.

For instance, the consensus view that UK rates would fall further to counteract the risk of a damaging fall in the housing market was challenged with the release of minutes from the Bank of England’s monetary policy committee’s meeting on April 23. The minutes showed that although the MPC had then decided to cut interest rates by 25 basis points to 5%, the nine-strong committee was split three ways: two members, Tim Besley and Andrew Sentance, voted to keep the BoE’s key repo rate on hold, while one member, David Blanchflower, voted for a larger, 50bp cut.

According to Matt Sharratt, European economist at Bank of America in London, the decision reaffirmed "the BoE’s apparent reluctance to engage in rapid rate easing given concerns about the near-term inflationary pressures".

Sharratt adds: "The BoE minutes recorded that there was a split between those believing that the downside CPI risks in the medium term had risen in light of the deteriorating economic climate and those that were ‘less clear, but on the basis of the central outlook, thought it was nevertheless appropriate to implement some of the further easing that was implied by the February inflation report projections.’"

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree