Bank of England base rate + Inflation report.

threlkeld53

Most markets and funds are down so far this year to date, though there has been a small rally throughout the first 3 weeks of July. Nevertheless, it's still a good time to invest spare cash into index funds and global trackers in order to hopefully take advantage of bargains.

The Bank of England's next meeting is 4th August 2022. Their inflation report will be published and what could be significant is possibly another base rate hike.
In view of this, would it influence your way of thinking whether to top up even more cash into your pensions and/or ISAs before this date? Or would you carry on regardless?

Is a worse than expected inflation figure and a subsequent increase in the base rate going to influence the markets, in which case an even better time to take advantage of decreasing cost of units? Obviously it's a guess, but we all have different gut feelings.

masonic

If you're investing into global trackers, then the UK data is going to have quite a minor influence on your investments. There will be no surprise if there's a further 0.25% increase in BoE base rate, 0.5% would be unexpected, but not shocking. At some point, attempts to combat inflation must be weighed against the threat of causing a deep recession (I think a technical recession is something the MPC would tolerate).

In answer to your question, no, the MPC meetings do not influence my investing behaviour. How often do they meet their target?

Lastonestanding

masonic said:

 There will be no surprise if there's a further 0.25% increase in BoE base rate, 0.5% would be unexpected, but not shocking. At some point, attempts to combat inflation must be weighed against the threat of causing a deep recession (I think a technical recession is something the MPC would tolerate).

Surely the expected rise is 0.5 since other countries banks have raised rates higher and 0.5 has been mentioned by the governor of the Bank of England 

ranciduk

I’ve read that 0.5 was pretty much nailed on, but very recent data has now meant its slightly less likely 

Albermarle

Nevertheless, it's still maybe a good time to invest spare cash into index funds and global trackers in order to hopefully take advantage of bargains.

'Hopefully' being the key word and I have inserted another word in bold.

Regardless  of what the BoE does, many other factors will affect what global index tracker will do in future.

masonic

Lastonestanding said:

masonic said:

 There will be no surprise if there's a further 0.25% increase in BoE base rate, 0.5% would be unexpected, but not shocking. At some point, attempts to combat inflation must be weighed against the threat of causing a deep recession (I think a technical recession is something the MPC would tolerate).

Surely the expected rise is 0.5 since other countries banks have raised rates higher and 0.5 has been mentioned by the governor of the Bank of England 

He said it "will be among the choices on the table when we next meet", and that it is “not locked in, and anyone who predicts that is doing so based on their own view”. It was also among the choices at the last meeting, with three members voting for a 0.5% rise, but this was outweighed by the others voting for 0.25%. The UK has one of the weaker economies, certainly not as resilient to rises as the USA, so that will be a factor. Bond and forex markets don't seem to have priced in a 0.5% rise in response to the comments, so if such a rise does materialise, I'd expect it to have an impact on these markets.