/ VIEW: Andy Chaytor and Anne Karina Asbjorn....>

BOE: / VIEW: Andy Chaytor and Anne Karina Asbjorn of Nomura say that since the

November inflation report "interest rates (short sterling and gilt yields) have

fallen" with the short sterling curve "now not fully pricing in a 25bp rate rise

until early 2019" later than what the market was pricing ahead of Nov MPC

meeting.

- Nomura see a risk that if the markets continues to price out future rate hikes

"the greater the likelihood the BoE ends up repeating its mantra from last

autumn" -- "monetary policy could need to be tightened by a somewhat greater

extend over the forecast period than current market expectations". And see a

risk that this could come as early as Feb MPC meeting.

- Nomura believe that four rather than two rate hikes over the next 2-years are

needed to bring inflation back to target by end of forecast horizon and see rate

rising in May and November of 2018 and 2019.