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Goldman: BoE Higher Inflation Tolerance, Favour Steepeners, Asymmetry In Mar ’24 BoE Pricing

GILTS

Late Friday Goldman Sachs wrote “a policy hold with underlying inflation elevated compared to peers suggests a relatively higher inflation tolerance by the BoE, which we think should require market compensation.”

  • “We see risks skewed to a steeper curve (2s10s), which should also be supported by the BoE’s balance sheet shrinkage at £100bn/year from October onward, and a rebuilding term-premium.”
  • “There is likely also asymmetry to Mar ‘24 BoE pricing (to the upside), and we would fade any rally from current levels.”
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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