HSBC: Pele, who makes hawkish remarks, will not vote for a rate hike

HSBC said that despite a series of hawkish remarks by Bank of England Governor Andrew Bailey in recent weeks, he would vote to keep interest rates unchanged at next Thursday's interest rate decision.

While the market almost fully digested the news that rates would be raised by 15 basis points on Nov. 4, HSBC senior economist Liz Martins expects the nine-member monetary policy committee to keep borrowing rates unchanged with a 7-2 vote. Only Michael Saunders and Dave Ramsden would choose to raise the benchmark lending rate.

Martins' outlook means that the Bank of England will surprise the market. Over the past few weeks, Pele has repeatedly warned that the Bank of England will have to act to curb inflation. The comments prompted investors to make a big bet on the Bank of England's rate hike in November, at least six months earlier than most economists had expected.

Expectations of the BoE's action have grown in recent weeks, and if the BoE does not raise interest rates by then, it could spark strong public criticism.

The Bank of England's credibility in the minds of investors has been hit hard by similar incidents in the past. During the tenure of former Bank of England Governor Mark Carney, the Bank of England's guidance was questioned. Carney has been dubbed an "unreliable boyfriend" and accused by lawmakers of misleading the market about future interest rate movements.

Martins believes the Bank of England may take steps to lower expectations that interest rates will exceed 1% by the end of 2022.