Investors seem to have yet to forget the surprise decision of the Bank of England (BOE) last December which had raised interest rates without giving any earlier indications.
Ahead of the policy meeting next week (February 3), investors are now seen as more prepared for any action from the BOE.
This is because, since the interest rate decision last month, no BOE policymakers have spoken out on monetary policy and current economic developments, particularly Governor Andrew Bailey.
This has sparked speculation from the market that the next interest rate hike will be made at the next meeting.
At the last meeting, the central bank surprised the market by raising interest rates by 15 basis points to 0.25% to address rising inflation to a 10 -year high (according to inflation data released in December).
However, the latest data shows the UK inflation rate has soared higher to hit its highest level in almost 30 years. So, it is not impossible if the central bank takes steps to raise rates again to fight inflation.
