–Analysts Bring Forward Rate Hike Calls Compared To Feb Survey

LONDON (MNI), Mar 9 – The following table shows analysts’ forecasts
ahead of the Bank of England Monetary Policy Committee’s March meeting,
and shows that they are, in the main, split over whether the first hike
will come in May or August.

Of the 39 analysts in the survey, 13 predicted the first rate hike
would come in the second quarter, typically May, and 11 went for a third
quarter, most likely August, hike.

The median forecast is for a third quarter hike – reflecting the
fact that all bar one of those analysts predicting neither May or
August hikes are forecasting later tightening.

The median probability put on a May rate hike – by a smaller sample
of 19 analysts who answered this question – is 60%. The March meeting,
which ends Thursday, is seen as a sideshow. The median probability
attached to any move at this week’s meeting is just 20%.

What the survey makes clear is that analysts have, on balance,
brought forward their rate calls in recent weeks.

In the survey ahead of the February meeting, analysts’ median
forecast was for the first rate hike to come in the fourth quarter of
this year.

The shift in analysts’ views is largely about the timing of rate
increases rather than the eventual magnitude. The median forecast, for
Bank Rate to end this year at 1.0%, is unchanged from February as is the
prediction it will be at 2.0% at end 2012.

!Time ! ! ! ! !Chance!Chance! !
!Of !Level!Level!Level!Level!Of !Of !Time !
!Next !of !of !of !of !Hike !Hike !Of !
!Bank !Bank !Bank !Bank !Bank !In !In !Next !
!Rate !Rate !Rate !Rate !Rate !Bank !Bank !Bank !
!Move !End !End !End !End !Rate !Rate !Rate !
!Qtrs !H1 !H2 !H1 !H2 !March !May !Move !
!Ahead!2011 !2011 !2012 !2012 !% !% !Month !
————————————————————————
Median 2 0.50 1.00 1.50 2.00 20 60
Mean 2 0.60 0.99 1.48 2.0 18.9 54.3
High 4 0.75 1.50 2.00 3.00 55.0 80.0
Low 0 0.50 0.50 0.50 0.50 1.0 15.0
————————————————————————
Prior Survey
Medians 3 0.50 1.00 1.50 2.00
————————————————————————
4Cast 2 0.50 1.00 1.50 2.00 5 15 Aug’11
ABN Amro 1 0.75 1.25 2.00 3.00 20 80 May’11
AIB 2 0.50 0.75 1.00 1.50 20 40 Q3’11
Barclays Capital 1 0.75 1.25 2.00 2.50 15 65 May’11
BNP Paribas 2 n/a n/a n/a n/a n/a n/a Aug’11 +25
BoA-ML 1 0.75 1.00 1.25 2.00 15 80 Nov’11 +25
BVCA 2 0.50 1.00 n/a 1.75 5 40 Aug’11 +25
Capital Econ. n/a 0.50 0.50 0.50 0.50 20 40 n/a
Citi 1 n/a n/a n/a n/a n/a n/a Q2’11 +25
Commerzbank 4 0.50 0.50 1.50 2.25 n/a n/a Q1 2012
Credit Suisse 1 0.75 1.25 1.75 2.25 10 75 May’11 +25
Daiwa 2 0.50 1.00 1.50 2.00 n/a 35 Aug’11 +25
Deutsche 2 0.50 1.00 1.50 2.50 25 40 Aug’11 +25
Global Insight 2 0.50 1.00 n/a 2.00 n/a n/a Aug’11 +25
Goldman 1 0.75 1.00 1.50 2.00 n/a n/a May’11
Henderson 0 n/a n/a n/a n/a n/a n/a Mar’11 +25
HSBC 4 0.50 0.50 1.00 2.00 n/a n/a Q1’12 +25
ING 1 0.75 1.00 1.50 2.00 n/a n/a Q2’11
Investec 2 0.50 1.00 1.50 2.50 n/a n/a Aug’11 +25
Jeffries 3 0.50 0.75 1.25 1.75 1 20 Nov’11 +25
JP Morgan 1 0.75 1.25 1.75 2.25 20 70 May’11 +25
L & G 2 n/a 1.00 n/a n/a n/a n/a Q3’11
Lloyds 3 0.50 0.75 1.75 2.50 n/a n/a Nov’11 +25
Lombard 1 0.75 1.00 1.50 2.00 n/a n/a May’11 +25
Monument 4 0.50 0.50 1.00 2.00 n/a n/a Feb’12 +25
Morgan Stanley 2 0.50 1.00 1.50 2.00 n/a n/a Aug’11 +25
NAB 1 0.75 1.50 2.00 2.50 n/a n/a May’11 +25
Nomura 1 0.75 1.25 2.00 2.25 n/a 60 May’11 +25
Novus Capital n/a 0.50 0.75 2.00 n/a 55 45 n/a
RBC 3 0.75 n/a n/a n/a n/a n/a Nov’11 +25
RBS 3 0.50 1.00 1.00 2.25 n/a 60 Nov’11 +25
RIA 2 0.50 1.00 1.50 2.00 n/a n/a Aug’11 +25
Schroders 3 0.50 1.25 1.50 2.00 35 65 Nov’11 +25
Soc. Generale 2 0.50 1.00 n/a n/a n/a 70 Aug’11 +50
Standard Ch. 4 n/a n/a n/a n/a n/a n/a Q1’12 +25
Stone McCarthy 1 0.75 1.00 n/a n/a n/a 65 May’11 +25
Sumitomo Mitsui 1 0.75 1.50 n/a n/a n/a n/a May’11 +25
UBS 2 0.75 1.25 1.75 2.25 n/a 66 Q3’11 +25
Westpac 3 0.50 1.00 1.00 n/a n/a n/a Nov’11 +25
————————————————————————
Number
Responses 38 34 34 28 28 13 19

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For more information contact UK editorial on 44-20-7862 7491 or e-mail:
drobinson@marketnews.com; wwilkes@marketnews.com

[TOPICS: M$B$$$,M$$BE$]