MNI SARB Review - September 2022: Look Geared For Further 75bps Move in Nov

Executive Summary:

• The Bank raised rates by 75bps, alongside expectations
• Market response was relatively muted, with the press conference doing little to sway pricing
• Consensus sees further tightening at the next meeting in November

Full review here:

MNISARBRevSep22.pdf

Growth and inflation forecasts were both tweaked, with 2022 growth marked slightly lower, but more than compensated by an upward revision to both 2023 and 2024 projections. More importantly, the inflation profile was unchanged for this year (6.5%), while being marked down for 2023 as well as 2024.

Nonetheless, the meeting represented a minor hawkish shift in tone from the council, with July’s dissention for a 50bps hike being reversed, with the vote split shifting to 3 – 2 (3 for 75bps, 2 for 100bps) from 3 - 1- 1 (3 for 75bps, 1 for 50bps and 1 for 100bps). This has prompted a few minor revisions from sell-side analysts for tightening later this year, with another 75bps hike now seen as the most likely November outcome.