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.