BoE: November to mark the first hike in a decade? - Nomura

Analysts at Nomura suggest that following the BoE’s decision to keep interest rates on hold at its August Inflation Report policy meeting, they shifted their view out to November for the first hike in a decade.

Key Quotes

“Since then, sentiment expressed in the September policy meeting and minutes has convinced financial markets that a move is imminent. While a November move is still not a done deal, it is rare for the market to price in a move in rates that the Bank does not deliver upon.”

“We expect a 25bp rise today will be the first in a number of tightening moves – we see the Bank raising rates by 25bp every six months thereafter, which while far slower than the historical average tightening cycle is somewhat faster than the market is expecting. As such, what the BoE says in its Inflation Report and press conference about the need for further tightening will be important in influencing market pricing looking further ahead.”