Analysts at Nomura suggest that their UK forecasts for growth and interest rates relative to the consensus look anomalous when compared with other countries, at first glance.
Key Quotes
“We are forecasting modestly stronger growth than the consensus for the UK, modestly faster (or perhaps ‘less slow’ would be a better description) policy rate rises and a steeper sell-off in 10yr government bonds – precisely the opposite of those forecasts relative to the consensus for the euro area, US and Japan next year.”
“Part of the explanation probably lies in our expectations being based on a Brexit deal with the EU that could unlock investment spending and – via lower inflation thanks to a rising pound – support consumption. But the risks are high and if more optimistic commentary this week about the possibility of securing a deal at next week’s European Council meeting (and indeed getting that deal through the parliamentary approval process) come to nought, then a rethink of our forecasts may yet be in order.”
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