UK: Revised BoE interest rate forecasts
Overview: Due to recent comments by members of the Monetary Policy Committee (MPC), growing financial convulsions and a bleak economic outlook, we revise our interest rate forecasts for the Bank of England (BoE). As shown in table 1, we expect the BoE cutting cycle to start in November and to continue with another five cuts into 2009, taking the Bank rate to 3.5%.
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Euroland: ECB to ease faster and more
We have changed our interest rate projections for the ECB. We are now looking for the ECB to lower the leading rates by 25 bp in December 2008 and by a further 25 bp in both February and April 2009. Previously we expected the ECB to lower rates by 25 bp in both March and June 2009. We therefore now expect rates to be cut deeper and more rapidly. We also see a risk of a further 25 bp rate cut by June. The precise timing of rate changes is a tricky question, and in these turbulent times timing
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