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View Change: Nomura now look for 4.75% terminal rate and push back cuts

BOE

Nomura has updated it's BOE view:

  • "After such strong inflation and earnings readings already this week, we now struggle to see any of that data stopping the MPC from raising rates further. As such, we take this opportunity to add another 50bp to our Bank Rate view – reflecting a 25bp hike in May and another in June. That would mean a peak rate of 4.75% by June."
  • "We have also pushed back our view of rate cuts modestly to begin in August 2024 (i.e. just over a year after the last hike), whereupon we expect 125bp of cuts (5x25bp moves) to reach 3.50% by February 2025 (the same terminal rate as we’d previously expected, but achieved later and with more cuts required)."

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