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View Change: BofA now look for 4 hikes in 2022 and remove rate cut call

BOE
  • "We argue the BoE reaction function has become less transparent and monetary policy more at risk of perceived politicisation."
  • "As a result inflation expectations may be less anchored so we expect higher interest rate, growth and inflation volatility."
  • "We change BoE call. We now expect 4 more hikes this year vs 3 before. We remove the 4Q 23 rate cut we previously forecast."
  • "We add another 25bp hike in September, now seeing 4 more 25bp hikes this year: in June, August, September and November. In our view the risks to our Bank Rate call are skewed up. We see an elevated risk of a 50bp hike in August."

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