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May 13 - 02:55 PM

GBP: Market Expecting A 10bp Rise By Next Summer But Rate Hikes May Be Delayed - Nomura

By eFXdata  —  May 13 - 12:30 PM

Nomura Research discusses its expectations for the BoE policy trajectory.

"The BoE decided to taper its asset purchases in May, from £4.4bn to £3.4bn per week, though the repercussions of this were limited because the Bank had already announced a pre-determined purchase plan and end-date (unlike the Fed’s ongoing monthly programme and the ECB’s ‘envelope’ as opposed to ‘target’ amount)," Nomura notes. 

"We do not expect any move in Bank Rate over our forecast horizon, though the market sees around a 10bp rise by the end of next summer. We think rate hikes may be delayed to the extent the Bank prefers to reduce the stock of gilt ownership (by not replenishing redemptions) in the first wave of policy tightening," Nomura adds.

Source:
Nomura Research/Market Commentary

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