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21 Feb 2014
Flash: BoE hike rolled back to November - Nomura
FXStreet (Bali) - According to Philip Rush, European Economist at Nomura, the BoE needs more time to see hikes are needed, hence the change by the bank in calling rate hikes from August to November.
Key Quotes
"Our consistent view has been that spare capacity would be used up quicker than the BoE expects, bringing forward the point when rate hikes would become necessary. Even our outlying forecast was surprised by the pace of improvement, though, causing us to pull our long-held February 2015 BoE call to August 2014 in December."
"Then, at its February Inflation Report, the BoE confirmed our expectation that its policy response is state-dependent and forward-looking, leaving the door open for an early hike. However, we judge the gap between us and the BoE on certain key items is no longer large enough for the Bank to get pulled into an August hike."
Key Quotes
"Our consistent view has been that spare capacity would be used up quicker than the BoE expects, bringing forward the point when rate hikes would become necessary. Even our outlying forecast was surprised by the pace of improvement, though, causing us to pull our long-held February 2015 BoE call to August 2014 in December."
"Then, at its February Inflation Report, the BoE confirmed our expectation that its policy response is state-dependent and forward-looking, leaving the door open for an early hike. However, we judge the gap between us and the BoE on certain key items is no longer large enough for the Bank to get pulled into an August hike."