Analysts at BBH think that the Bank of England tightening expectations may need to adjust lower.

Swaps market back to pricing in a peak policy rate near 4.75%

"The Office for National Statistics reported that 6 out of 10 surveyed are planning to cut spending during the holiday period by buying fewer and less expensive presents as well as by eating out less.  The ONS survey ran through mid-December and also showed 18% had no savings to cushion the rising cost of living and 7% had missed a payment on a bill in the past month."

"Almost half have had difficulty heating their homes and a third have struggled with rising rents or mortgages.  With little relief expected on the fiscal front, it’s shaping up to be a very difficult winter for UK households.  In related news, a separate consumer survey showed nearly 2 mln UK households had failed to make at least one mortgage, rent, loan, credit card, or any other bill payment over the last month."

"Bank of England tightening expectations may need to adjust lower.  WIRP suggests a 50 bp hike February 2 is about 75% priced in, with no odds of a larger 75 bp hike.  The swaps market back to pricing in a peak policy rate near 4.75% vs. 4.5% right after last week’s BOE decision but still down sharply from 6.25% right after the mini-budget in late September."