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BOE: VIEW CHANGE: RBC looks for sequential cuts to 3.75%

BOE
Bank of EnglandCentral Bank NewsCEEMEABulletUKGlobalFixed Income BulletsForeign Exchange BulletsRegionMarkets
  • RBC has changed its BOE call, noting this morning's communication and changes to its Fed and ECB calls as being behind the change.
  • It now expected sequential 25bp cuts at each meeting between November and May to a terminal 3.75%. RBC estimates that 3.75% is in the middle of its "neutral range" estimate.
  • Note that prior to this change RBC had the most hawkish BOE forecasts of all the analysts that we track, and had only looked for 25bp cuts in November, February and May to a terminal 4.25%.
  • The change puts RBC in line with the consensus with a terminal rate of 3.75%. However, after the September MPC meeting there were only 7/22 of the analysts that we track looking for cuts in both November and December.
  • We expect that RBC won't be the only ones to change their call over the coming days, particularly given the change in expectations for an accelerated ECB cutting cycle.
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  • RBC has changed its BOE call, noting this morning's communication and changes to its Fed and ECB calls as being behind the change.
  • It now expected sequential 25bp cuts at each meeting between November and May to a terminal 3.75%. RBC estimates that 3.75% is in the middle of its "neutral range" estimate.
  • Note that prior to this change RBC had the most hawkish BOE forecasts of all the analysts that we track, and had only looked for 25bp cuts in November, February and May to a terminal 4.25%.
  • The change puts RBC in line with the consensus with a terminal rate of 3.75%. However, after the September MPC meeting there were only 7/22 of the analysts that we track looking for cuts in both November and December.
  • We expect that RBC won't be the only ones to change their call over the coming days, particularly given the change in expectations for an accelerated ECB cutting cycle.