LONDON, Sept 25 (Reuters) – Morgan Stanley changed its Bank of England interest rate call on Friday, predicting Britain’s central bank will now deliver two 25 basis point hikes in November and February, having previously expected no hikes for the foreseeable future.
“We formally change our BoE call to two quarterly hikes, with fiscal policy, we think, the key potential catalyst for more tightening,” Morgan Stanley’s analysts said in a research note.
“We expect a slowdown in growth at the turn of the year but, given the robustness of global growth, see balanced near-term risks.”
The BoE kept rates on hold last week but warned they might have to go up if the Iran war drags on, while predicting British inflation will top 4% early next year.
(Reporting by Marc Jones; editing by Dhara Ranasinghe)
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