J.P. MorganExpectations of when the Bank of England may raise interest rates will be brought forward, saying that strong momentum in the UK labor market may prompt the central bank to take action in the second quarter of 2022.

Economist Allan Monks said that the first rate hike of 15 basis points to 0.25% would be six months earlier than he had anticipated, after which the Bank of England would raise interest rates every six to nine months. He is showing a record increase in wages according to official dataNagawaThe above expectations were posted after the job was vacant.

“The market demand for net new jobs is strong, and this is happening in the face of a labor shortage,” Monks wrote in a report on Tuesday. He said the surge in employment “suggests that most people who have taken off paid leave have stayed with their current employers or found new jobs.”

J.P. Morgan joined the ranks of institutions such as Bank of America and HSBC, predicting that the Bank of England will raise interest rates by the middle of next year. This is more hawkish than most economists' predictions. The median market forecast is that the Bank of England will remain on hold until the November 2022 meeting.

The date of the first rate hike is critical for the UK treasury bond market. The market is looking for signs that the Bank of England may stop reinvesting in British Treasury bonds when their current holdings mature. The Bank of England has stated that interest rates must rise to 0.5% before such action is taken.