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• BoE rate decision and minutes due Thursday 22nd June 2023 at 12:00BST/07:00EDT
• The MPC is expected to deliver another 25bps hike; will likely be subject to dissent
• Focus will be on how committed the MPC is to further tightening

The Monetary Policy Committee is anticipated to deliver a further 25 basis points hike. The question on everyone's mind, however, is just how committed the MPC is to continued tightening. In the run-up to this decision, there's a unified expectation among economists. All 64 surveyed by Reuters anticipate the BOE to increase rates by another 25 basis points, pushing the Base Rate to 4.75%. Following the May inflation data release, the markets are pricing in a 55% probability of a 25 basis points hike, and a 45% chance of a more aggressive 50 basis point move. Recently released CPI data showed that the year-over-year headline rate remains steady at 8.7%, exceeding the consensus of 8.4% and the MPC's expectation of 8.3%. Furthermore, the core year-over-year advanced to 7.1% from the previous 6.8%. On the employment front, the April data reflected a rise in headline earnings growth to 6.5% from 6.1%, with an unexpected fall in the unemployment rate to 3.8% from 3.9%. Recapping the last MPC meeting, the Bank rate was increased by 25 basis points to 4.5% through a 7-2 vote split. The guidance that "if there were to be evidence of more persistent pressures, then further tightening in monetary policy would be required" was upheld. Importantly, the inflation projections for 2023 were raised to 5% from 4%, and the GDP projections for 2023-2025 saw an upward revision. MPC members have presented varied views recently. While Governor Bailey acknowledged the persistence of inflation, Chief Economist Pill voiced concerns about the UK economy's momentum. MPC member Mann highlighted concerns about services inflation and persistently high inflation expectations. Dissenter Dhingra, however, suggested a focus on the medium term due to "lags in monetary policy transmission." While the market is clearly leaning towards a rate hike, the quantum remains a subject of debate. Further, the question remains as to the path forward. Considering the strain on UK homeowners remortgaging at higher rates, many analysts suggest the current market pricing of 150 basis points might be a bit aggressive. Many desks point towards a final 25 basis points hike in August that will solidify the Bank Rate at its terminal level. With the absence of a Monetary Policy Report accompanying this release, it remains to be seen whether and how the MPC will resist aggressive rate path expectations.