BOE: GS push forward first BOE hike forecast:
                                   

* Goldman Sachs has pushed forward its initial Bank Rate hike to May 2022       

  (15bp) “to be followed by subsequent increases of 25bps every two quarters,   

  putting Bank Rate at 0.5% in 2022Q4, 0.75% in 2023Q2 and 1.0% in 2023Q4.”     

* They expect reinvestments to cease when Bank Rate reaches 0.5% in Q422 and    

  then “the BoE to begin active asset sales in 2024, after hitting the stated   

  1.0% threshold at the end of 2023.” They expect the BOE to “pause the hiking  

  cycle in 2024 in order to assess the impact of asset sales.”                  

* Previously GS expected the first (15bp) hike in Q3-23 with a further 25bp in  

  Q1-24 accompanied by balance sheet runoff and then 25bp more in Q3-24 to      

  0.75%.                                                                        

* GS made the change following yesterday’s labour market data and note that     

  they “now see scope for greater re-absorption of furloughed workers back into 

  employment after 30 September relative to our previous expectation that       

  around 250k furloughed workers would become unemployed during Q4. As a        

  result, our revised unemployment rate forecast has a sharper decline in Q3    

  followed by an increase to a peak of around 4.9% in Q4-a less disruptive      

  outcome than we previously expected but an unemployment rate that still peaks 

  slightly above the BoE’s modal path in the August MPR”                        

* GS also note that the 4-4 split of MPC members who announced they thought the 
necessary (but not sufficient) criteria for tightening had been set will move 

to 5-4 as “we believe the newly appointed Chief Economist, Huw Pill, is       

likely to join the group of internal members thinking the minimum conditions  

for tightening policy have been met. This news implies an earlier rate        

increase than we previously thought.”