Free Trial

View change: GS looks for 2x75bp hikes and terminal rate of 4.50%

BOE
  • “In response to today’s hawkish vote split, a tighter labour market, and the upcoming upgrades to growth and core inflation at the November MPR, we revise up our forecast for terminal Bank Rate from 4.0% to 4.5%. We now look for 75bp hikes at the next two MPC meetings (November and December), before a step-down to a 50bp hike in February and a 25bp hike in March.”
  • Note that this is the most hawkish analyst forecast that we have seen thus far.
  • “With three MPC members voting for a larger 75bp increment and External Member Tenreyro shifting from preferring a 25bp hike to 50bp, there was a hawkish shift in the vote.”
  • “It seems that there is significant amount of agreement among MPC members on the outlook, and differences in views as to the pace of hikes reflect preferences over the need to front-load tightening. This suggests that the choice between voting for 50bp or 75bp was a relatively close call for many MPC members at today’s meeting.”
  • “Given cost-of-living pressures are likely to weaken the data flow in the run up to the December meeting, a succession of 75bp hikes is not a done deal and it will be important to monitor the incoming data to assess the strength of growth momentum and the labour market towards year end.”

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.