Goldman Sachs expects the Bank of England to hike by 50bp at its August meeting

UK economists at Goldman Sachs are expecting the Bank of England Monetary Policy Committee to raise the Bank Rate by 50bp at the August meeting

Goldman Sachs forecast a Bank Rate peak of 6% in November this year.

GS cite in reasoning:

  • firm wage pressures
  • firm inflationary pressures
  • With mostly fixed-rate mortgages in the UK, our Economists’ models
    show that the stock of outstanding mortgages are responding more
    slowly to policy rate changes.
  • This delayed adjustment in output puts upward pressure to BoE’s
    policy path.

ps. Goldman Sachs on Japan – say if stocks drop on a Bank of Japan YCC ‘tweak’ would provide a buy opportunity.

This article was written by Eamonn Sheridan at Source