New BoE and gilt yield forecasts

This week’s signs that two members of the Monetary Policy Committee have become more worried about the upside risks to inflation have led us to bring forward our forecast of when policy will be tightened from February 2024 to August 2023. That’s still some way off and is 12 months later than the financial markets expect. Because of that, we have also revised down our forecast for 10-year gilt yields.