LONDON — Japanese bank Nomura forecast on Thursday that the Bank of England will raise interest rates for the first time in a decade at its next rate meeting on Aug. 3, far earlier than most economists have previously predicted.
Nomura economist George Buckley said BoE chief economist Andy Haldane’s call for a rate rise this year in a speech released on Wednesday, combined with a 5-3 vote split among BoE rate-setters last week, made an early rate move likely.
“With the Bank growing increasingly intolerant of above-target inflation, it has begun to feel that weaker data would now be needed to prove the case for keeping policy on hold, rather than stronger data being required to justify higher rates,” Buckley wrote in a note to clients.
None of the more than 50 economists polled by Reuters at the start of this month expected the BoE to raise rates this year, and most – including Nomura – did not expect rates to rise in 2018 either.
(Reporting by David Milliken; Editing by William Schomberg)