The BoE is expected to hike by 50bp today. Goldman Sachs say more hikes ahead in H1 2023.

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The BoE is expected to hike by 50bp today. Goldman Sachs say more hikes ahead in H1 2023.

<p>Services inflation is key to Goldman Sachs view of more rate hikes ahead. Earlier this week we had data showing:</p><ul><li><a href="https://www.forexlive.com/news/uk-november-cpi-107-vs-109-yy-expected-20221214/" rel="follow" target="_self" class="article-link">UK November CPI +10.7% vs +10.9% y/y expected</a></li></ul><p>That 10.7% headline rate is under Bank of England forecast, a good sign at the margin. But, services sector inflation is steady at the same rate as the previous month, at a 30-year high of 6.3%.</p><p>Says Goldman Sachs Asset Management:</p><ul><li>Wage growth, a key determinant of services inflation, is around 6%, double the level estimated to be consistent with the Bank's 2% inflation target</li><li>We think the Bank will opt for further hikes in the first half of 2023, until inflation shows less momentum</li></ul><p>Bank of England Governor Bailey </p>

                This article was written by Eamonn Sheridan at www.forexlive.com.

Source: The BoE is expected to hike by 50bp today. Goldman Sachs say more hikes ahead in H1 2023.

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