Strategist: The expected interest rate hike by the Bank of England seems too aggressive.

Ebury strategist Matthew Ryan said in a report that market expectations for a rate hike by the Bank of England seemed too aggressive after the central bank kept rates unchanged at 3.75% on Thursday. "Unlike the inflation situation in 2022, the current oil supply shock is expected to be temporary, and weakness in the labor market should dampen any second-round effects," he said. He added that the Bank of England is keeping its options open, but this is not a commitment to hike rates. He suggested that there may be some mild tightening if needed, but given the fragility of the country's economy and job market, rates should remain unchanged for now. Market data from the London Stock Exchange Group shows that the market is expecting a 62 basis point rate hike by the end of the year, compared to a pre-decision expectation of 78 basis points.