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Goldman On BoE/Growth Outlook


Goldman has revised down its UK growth outlook and BoE rate projection, see below.

  • "Folding in weaker growth momentum, significantly tighter financial conditions, and the higher corporation tax from next April, we downgrade our UK growth outlook further and now expect a more significant recession in the UK with non-annualised growth of -0.5% in Q3 (unrevised), -0.6% in Q4 (vs -0.1% previously), -0.4% in Q1 (vs -0.2% previously), and -0.1% in Q2 (unrevised). This lowers our 2023 annual growth projection from -0.4% to -1.0%, below consensus expectations."
  • "As a result, we now see less pressure on the BoE to tighten aggressively and revise down our estimate of terminal Bank Rate from 5.0% to 4.75%. We now look for 75bp hikes in November and December (from 100bp previously), followed by a 50bp hike in February and two 25bp hikes in March and May. Our updated path for Bank Rate is significantly below market pricing."

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