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Summary of Analyst Views: Update

  • We have updated our subset of 15 analyst views with the addition of BofA and Citi's forecast updates over the past 24 hours. All of the analysts have updated or reaffirmed their forecasts following the energy support scheme announced by Prime Minister Liz Truss last week.
  • BofA looks for a terminal rate of 4.00% by August 2023 while Citi expects 3.75% by March 2023. Both see 50bp hikes next week.
  • 11/13 (85%) of analysts look for a 50bp hike in September while BNP and JP Morgan look for a 75bp hike (15%). This is below market pricing of 69bp (which implies around a 76% probability of a 75bp hike with 50bp fully priced).
  • Terminal rate expectations are 75-100bp higher than following the August meeting, but still below market expectations: The median is 3.50% (up from 2.50% following the August MPC meeting) while 62% of analysts expect a terminal rate of in a 3.00%-3.50% range (previously 87% had expected in a 2.25%-2.75% range).
  • The terminal rate according to market pricing is around 4.47% at the time of writing.
  • 4/15 analysts explicitly say they expect cuts in 2023 (down from 8/15).

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