Proactive Investors -
- FTSE 100 up 32 points at 7,662
- Bank of England rate decision at midday
- Shell (LON:RDSa) launches $3.5bn share buyback
Goldman expects 9-0 vote to leave UK rates unchanged; first cut in May
Goldman Sachs (NYSE:GS) expects a 9-0 vote to leave interest rates unchanged at midday.
The vote split remains “difficult” to predict given limited recent commentary by MPC members, the bank said, and a dovish dissent in the form of Dhingra voting for a 25bp cut and/or a hawkish dissent in the form of Mann voting for 25bp hike are possible.
But “we think hawkish dissents are less likely given that there has been a moderation in underlying services inflation since the MPC’s last meeting.”
Goldman expects the updated projections to show “meaningful revisions.”
It expects the growth forecast to be revised upwards and the inflation projections down in the near-term given lower energy prices.
Goldman suggested that the MPC may mitigate its tightening bias and soften its policy language somewhat by no longer stating that “further tightening in monetary policy would be required if there were evidence of more persistent inflationary pressures.”
It continues to expect the first 25bp cut in May, followed by 25bp cuts every meeting until Bank Rate reaches 3% in May 2025.
But it sees risks to the baseline forecast as being skewed towards later cuts.
Goldman adds Rolls-Royce to Conviction List; Next hit by downgrade
Plenty moving stocks this morning.
In the FTSE 100, Airtel Africa leads the risers, up 4.9% after launching a £100 million share buyback alongside third quarter results.
BT (LON:BT) is up 2.5% after its third quarter trading statement while Shell is 1.1% to the good after its buyback and results.
Rolls-Royce (LON:RR) is another riser, up 0.9%, after Goldman Sachs added the aerospace outfit to its ‘Conviction List’.
Heading the other way is Next PLC (LON:NXT), down 2.4%, after Barclays (LON:BARC) downgraded to ‘equal weight’ from ‘overweight’ while Pets at Home is 2.1% lower as Berenberg downgraded to ‘hold’ from ‘buy’.
Elsewhere, EasyJet is flying 0.9% higher as JPMorgan (NYSE:JPM) upgrades to ‘overweight’ from ‘neutral’.