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View change: Nomura: Next hike in June (terminal rate still 1.75%)

BOE
BulletMarketsFixed IncomeForeign Exchange
  • Nomura updated it's BOE call yesterday and now sees hikes in June, August and November.. See below for more.
  • “The fact that some members of the Bank’s Monetary Policy Committee voted for a 50bp rate hike at this week’s policy meeting suggests the Bank will sanction another hike at its next meeting in June (we had previously been expecting a pause at that point). That’s despite the fact that some members questioned the merit of providing further guidance on the need for future tightening at today’s meeting.”
  • “While we have retained our view of a terminal rate of 1.75% we have brought forward the point in time at which that is reached by three months. We now see 25bp rate hikes in June, August and November this year at which point we think the Bank will be stopped-out by a turn in the economic cycle and expectations of slowing inflation thereafter.”
  • “The Bank is due to report its thoughts at the August policy meeting which would “allow the Committee to make a decision at a subsequent meeting on whether to commence sales”. That fits in with our current view of the Bank announcing in November sales starting from early 2023. If anything today’s announcement raises the prospect of sales happening earlier rather than later than our view – notwithstanding the weaker growth outlook.”
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  • Nomura updated it's BOE call yesterday and now sees hikes in June, August and November.. See below for more.
  • “The fact that some members of the Bank’s Monetary Policy Committee voted for a 50bp rate hike at this week’s policy meeting suggests the Bank will sanction another hike at its next meeting in June (we had previously been expecting a pause at that point). That’s despite the fact that some members questioned the merit of providing further guidance on the need for future tightening at today’s meeting.”
  • “While we have retained our view of a terminal rate of 1.75% we have brought forward the point in time at which that is reached by three months. We now see 25bp rate hikes in June, August and November this year at which point we think the Bank will be stopped-out by a turn in the economic cycle and expectations of slowing inflation thereafter.”
  • “The Bank is due to report its thoughts at the August policy meeting which would “allow the Committee to make a decision at a subsequent meeting on whether to commence sales”. That fits in with our current view of the Bank announcing in November sales starting from early 2023. If anything today’s announcement raises the prospect of sales happening earlier rather than later than our view – notwithstanding the weaker growth outlook.”