International Financial Outlook Report – October 2018

Summary of key forecasts

  • We maintain our forecast for UK bank rate to rise by 1.00% in Q3 2019. Financial markets had previously priced in a later rise, but are now aligned to our central view. The Brexit negotiations represent a key unknown, but we continue to assume a withdrawal agreement will be reached and ratified by March 2019.
  • The US Federal Reserve is expected to next raise rates in December, taking interest rates to 2.5%. We see two further increases next year to 3%. The ECB is expected to complete its QE programme this year and start raising policy rates in Q3 2019.
  • Our profile for UK 10-year bond remains rising, with yields at 1.7% at end-2018 and 1.8% by end-2019. 
  • In FX, we have left unchanged our end-2018 and end-2019 targets for both GBP/USD and EUR/USD, in part reflecting a firmer dollar. USD/CNY targets have been adjusted to account for persistent trade tensions.

Read the full International Financial Outlook Report for October 2018

Read the full International Financial Outlook report for September 2018

 

 

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