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  • The 4Q21-QIR will contain updated forecasts for growth (likely to be downgrades) and headline/core inflation over the relevant horizon for monetary policy (likely to have deteriorated in the short run versus the forecast path in the 3Q20-QIR but to still converge to the 3.0% target by 2H2023).
  • Furthermore, in the 4Q21-QIR the central bank may update the overall growth-inflation balance of risks and possibly the forward guidance vis-à-vis the most recent set of MPC Minutes given that for the QIR, the central bank has a larger set of data than it did when the MPC last met on Nov 11, namely: 1H Nov inflation report (higher than expected headline and core), and the revised (2nd vintage) real GDP figures for 3Q2021 (lower than expected).
  • On growth, in the 3Q20 QIR the bank was forecasting 2021 real GDP growth between 5.7% and 6.7%; Goldman expect the new forecast to be significantly lower, by between -100bp and -150bp. The growth outlook for 2022 (2.0%-4.0%) may be also downgraded.
  • In order to calibrate the monetary policy path, GS will pay particular attention to the characterization of the balance of risks to inflation (which they expect to remain biased to the upside) and the list and ranking order of both upside and downside risks to inflation.
  • On the most recent minutes, GS did not detect a strong inclination or signal for near-term acceleration of the pace of hikes even though a couple of directors seemed open to consider it.