BofA Moves Forward Hike Forecast To Nov

BofA has "reluctantly" shifted their BoE hiking call forward a month, and now see a 15bp increase in Nov (previously saw December, itself a revision they made a couple of weeks ago, vs February previously). They see a 6-3 vote in favour of a 15bp hike next week.

• "Reluctantly because the data have not been hawkish since we brought forward our call to December, hiking while doing QE could be confusing, the BoE gets post-Furlough labour market data in December, and not all rate setters seem on board with hikes. We see a greater risk of the BoE hiking 15bp and ending QE early next week than hiking more than 15bp."
• Further out, they see another 25bp hike in Feb and a third hike in 2023; QT to begin with the March 2022 redemption. "After two rate hikes and Quantitative Tightening starting in early 2022 we expect the BoE to at least pause for 3-6 months to assess the economic reaction."
• As such their expectations are for a more gradual rate hike path than the market is currently pricing, and BofA thus sees "asymmetric downside risks for GBP".