Analyst View Changes

The majority of analysts have maintained their forecasts following yesterday's MPC meeting. However, we note the following changes:

• Credit Suisse: "The BoE’s dovish tone, decline in risk premium in UK assets and upcoming fiscal consolidation imply that the 75-bp hike today is likely to be a one-off. We now think the BoE will hike by 50bps in December, compared with 75bps before.” CS keeps its “terminal rate forecast unchanged at 4.5% in H1 2023 (50-50-25-25) and think the BoE will take longer to get there."
• Daiwa: "While much will depend on the government's updated plans for fiscal policy to be announced on 17 November, as well as the nature of any further shocks that might hit the UK economy over coming months, we have nudged down our own forecast for the terminal rate to near the mid-point of those two extremes, to 4.25%.” Daiwa had previously looked for a terminal rate of 4.75%.
• SEB: “Economic risks are growing and the recession outlook over the coming two years has been more stressed than before. We expect the MPC to hike by 50bps to 3.50% in December, and by another 50bps in February to 4.00%.” SEB had previously expected 50bp hikes in November and December to a terminal rate of 3.25%.