BOE to hike interest rates in November meeting – Goldman Sachs
The Goldman Sachs economist predicts three rate hikes at alternate meetings from next month, taking BOE’s benchmark rate to 0.75% by May, before a move to 1% by the end of next year, per Bloomberg.
Key quotes
"I continue to believe that higher inflation will be temporary because it is in the nature of the underlying causes.”
“But the energy story particularly means that it will last longer and it will, of course, get into the annual numbers for longer as a consequence of that.”
“And that, of course, raises for central banks the fear and concern of embedded inflation expectations.”
“As I've said before, monetary policy cannot solve supply-side problems, but it will have to act and must do so if we see a risk particularly to medium-term inflation and to medium-term inflation expectations, and that is why we at the BOE have signaled - and this is another such signal - that we will have to act.”
“But of course, that action comes in our monetary policy meetings."
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
