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Sell-side inflation reactions

UK DATA
  • Berenberg: "The 9.0% rise in April consumer prices is in line with the BoE’s latest estimate and thus should not change its near-term reaction function or guidance – we continue to expect two more 25bp hikes this year."
  • ING: "While there are plenty of upside risks to UK inflation, we suspect April's 9% figure will mark the peak... expect another hike in June and August before the committee most likely pauses its tightening cycle."
  • JP Morgan: "We lift our forecast for the rest of the year to show a higher peak of just over 9% in October, related to: recent momentum in food and services prices, higher petrol, the weaker currency and labor market tightness.. with a slightly higher peak of 9.2% in October (up 1%-pt) as domestic energy bills rise again - although we do not have the CPI reaching the 10% peak forecast by the BoE."
  • Goldman Sachs: "Looking ahead, we expect inflation in the UK to remain elevated throughout 2022 due to supply chain disruptions, strong wage growth and higher energy prices. As such, we continue to expect the BoE to hike in back-to-back meetings through August, taking Bank Rate to 1.5%."

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