In a speech in Dorset on Tuesday, Bank of England (BoE) policymaker Ian McCafferty, a renowned hawk, who has voted in favor a hike most number of times over the past four years, said that the probability of a hike as the next move from the bank of England (BoE) is equal to the probability of a rate cut. The comments are pretty hawkish considering the fact that BoE just launched fresh stimulus in August that includes a rate cut of 25 basis points, £60 billion additional bond purchases, £10 billion worth of corporate bond purchases, and £100 billion worth of targeted lending scheme, all to be funded by the bank’s balance sheet. In addition to that, these comments are in sharp contrast to the market expectations that the central bank might have to ease a lot over the next two years, during the negotiating process.

Mr. McCafferty added, “The balance of risks around the outlook was two-sided, such that from the current level, any further changes in our policy stance in the near future were as likely to be upward as downward……The precise parameters of that trade-off judgment have shifted. In our November forecast, the inflation overshoot was greater, and growth in the economy more resilient, than initially thought. As such, the earlier bias in the Committee’s guidance, in favor of further easing, has expired. Our collective assessment of the trade-off, and our policy judgment that results, will remain critically dependent on the path of the economy over the coming year or so.”