–Only Three Analysts See A Hike By Q4 2010

LONDON (MNI) – Analysts expect the Bank of England’s Monetary
Policy Committee to leave Bank Rate at its record low 0.5% level until
2011, according to a Market News survey.

The median forecast is for the first hike to come in Q1 of next
year, although analysts are split over whether the first hike will
come in Q1 or Q2 of next year.

Three analysts – Simon Ward of Henderson, Philip Rush of Nomura and
Niraj Shah of Stone and McCarthy – are forecasting a hike in Q4 of this
year, although in general the tendency is still for analysts to be
pushing back the timing of the next hike. In the previous survey,
Henderson was forecasting a hike in August 2010 and RBS was looking
at a November hike.

Thereafter, the median forecast is for 100bp of tightening to occur
over the course of next year.

The following table summarises Market News’ rate expectations
survey – covering 35 economics teams.

The penultimate column on the right of the table below shows their
expectations in quarters ahead with, for example, a hike in Q4 this
year shown as 1. On this basis the median forecast is for a hike two
quarters ahead.

The far right hand column gives analysts’ prediction for the
quarter in which the next rate move will come.

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Key Results:

Median Forecast for Bank Rate End 2010: 0.5%
Median Forecast for Bank Rate End H1 2011: 1.0%
Median Forecast for Bank Rate End H2 2011: 1.5%
Median Forecast for Time of Next Bank Rate Move: Q1 2011
————————————————————————

! ! ! ! ! Time ! Time !
! ! !Bank !Size ! Next ! Next !
!Bank ! Bank !Bank !Next ! Bank ! Time !
!Rate ! Rate !Rate !Bank ! Rate ! Next !
!End ! End H1 !End H2 !Rate ! Move ! Bank !
!2010 ! 2011 !2011 !Move ! Qtrs ! Rate !
! % ! % ! % !bps ! Ahead ! Move !
————————————————————————
Median forecast 0.5 1.0 1.5 25 2
High forecast 1.0 2.0 2.5 50 6
Low forecast 0.5 0.5 0.5 0.25 1.0
————————————————————————
Number of responses 35 26 27 25 31
————————————————————————
4Cast 0.50 1.00 2.00 50 3 Q2 2011
ABN Amro 0.50 n/a 2.50 25 2 Q1 2011
Allied Irish Bank 0.50 0.75 n/a n/a 2 Q1 2011
Barclays Capital 0.50 1.50 2.00 50 3 Q2 2011
BNP Paribas 0.50 0.50 0.50 n/a 6 2012
BoA-ML 0.50 n/a 1.25 n/a 3 May 2011
Capital Economics 0.50 0.50 0.50 n/a n/a No change
Citi 0.50 0.75 1.00 25 3 Q2 2011
Commerzbank 0.50 0.50 1.00 50 5 Q4 2011
Daiwa 0.50 n/a 1.00 25 2 Q1 2011
Deutsche 0.50 1.5 2.5 50 2 Q1 2011
Fathom 0.50 0.50 1.25 25 4 Q3 2011
Global Insight 0.50 0.75 1.50 25 3 Q2 2011
Goldman 0.50 n/a 2.50 n/a 3 Q2 2011
Henderson 1.00 2.00 2.50 25 1 Q4 2010
ING 0.50 0.50 n/a n/a n/a Late 2011
Investec 0.50 n/a n/a n/a 2 Feb 2011
Jeffries 0.50 1.00 1.50 50 2 Q1 2011
JP Morgan 0.50 n/a 1.25 25 3 Q2 2011
Lloyds 0.50 1.00 1.50 25 2 Q1 2011
Monument 0.50 1.00 n/a 25 2 Q1 2011
Morgan Stanley 0.50 1.50 2.00 50 2 Q1 2011
National Australia Bank 0.50 n/a n/a 25 3 Q2 2011
Nomura 0.75 1.00 1.50 25 1 Q4 2010
RBS 0.50 0.75 1.25 25 3 May 2011
RIA 0.50 1.00 1.50 25 2 Feb 2011
Schroders 0.50 1.00 1.75 25 3 May 2011
SEB 0.50 n/a 2.00 n/a n/a n/a
Stone McCarthy 0.75 1.00 1.50 25 1 Nov 2010
Societe Generale 0.5 1.50 2.50 n/a 2 Feb 2011
Sumitomo Mitsui 0.50 1.00 1.50 50 3 May 2011
UBS 0.50 0.75 2.00 25 2 Q1 2011
Unicredit 0.50 0.75 n/a 25 2 Q1 2011
Westpac 0.50 1.00 n/a 25 3 May 2011
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For more information contact UK editorial on 44-20-7862 7491 or e-mail:
drobinson@marketnews.com.

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