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We Have Moved The First BOE Hike To November 2015

Published 04/15/2015, 08:30 AM
Updated 05/14/2017, 06:45 AM

We have moved the first Bank Rate hike three months forward from August 2015 to November 2015. The main reasons behind our new call are that we have pushed our call for the first Fed hike to September, the appreciation of the GBP in recent months and slower growth in Q1 15.

We still believe that Bank of England will hike this year despite low inflation, as inflation is expected to pick up when the base effects from the drop in food and energy prices fade. We expect wage growth to pick up further this year in step with the decline in labour market slack. However, future wage growth remains a downside risk to our call.

Along with our call, we have revised our yield forecast down some 10 to 20bp across the GBP curve and our one- to six-month EUR/GBP forecast slightly higher.

To Read the Entire Report Please Click on the pdf File Below

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