FACTBOX-Major brokerages drop BoE March rate-cut call as inflation risks rise
March 16 (Reuters) - Major brokerages including Goldman Sachs and Morgan Stanley have pushed back expectations of a Bank of England rate cut, now seeing the central bank on hold in March as the U.S.-Israeli war on Iran drives up energy prices and inflation risks.
The shift shows how quickly the conflict has upended market assumptions, with analysts warning that sustained rises in oil and gas costs could keep the BoE on hold longer than previously expected.
Economists polled by Reuters mostly expect the MPC to vote 7-2 to keep the Bank Rate at 3.75%, whereas before the war erupted on February 28, a quarter-point reduction had been widely anticipated.
Brokerage | Pre-conflict policy outlook | Post-conflict policy outlook | Terminal rate by year-end 2026 |
BofA Global Research | 2 (March and June) | 2 (June and September) | 3.25% |
Deutsche Bank | 2 (March and June) | 2 (June and Q4) | 3.25% |
Morgan Stanley | 3 (March, July and November) | 2 (April and November) | 3.25% |
Citigroup | 3 (April, June and September) | 2 (June and September) | 3.25% |
Goldman Sachs | 3 (March, June and September) | 2 (July and November) | 3.25% |
BNP Paribas | 1 (March) | Nil | 3.75% |
J.P.Morgan | 2 (March and June) | 2 (April and July) | 3.25% |
Nomura | 2 (March and June) | 2 (April and July) | 3.25% |
Standard Chartered | March | Cuts in Q2 | - |
UBS Global Research | 2 (March and June) | 2 (April and July) | 3.25% |
Berenberg | 3 | 3 (next in June) | 3.00% |
Barclays | 1 (March) | Nil | 3.75% |
