BOE: MaPS Survey: Lower neutral; remit GBP6bln higher 25/26, GBP20-30bln 26/27
- The median expectation for the December meeting is for a cut to 3.75% (note this was conducted late October ahead of the known meeting outcome yesterday).
- The 25th percentile then saw a cut to 3.50% in February but the median not until March and the 75th percentile not until April. This is also the lowest Bank Rate will reach through 2026 for the 75th percentile.
- The 25th percentile sees a cut to 3.25% in April but the median not until July. This is the terminal rate for the median. The 25th percentile sees another cut to terminal 3.00% by July.
- On the neutral rate, the median expectation has fallen to 3.00% for the first time since the survey ahead of the February 2024 meeting. It had fluctuated between 3.25-3.50% since then. The 75th percentile remains at 3.50% while the 25th percentile remains at 3.00% (both have been stable through this period).
- Regarding remit expectations the median expectation is for a revision for FY25/26 to GBP305bln (around a GBP6bln increase from GBP299.1bln). The 25th percentile looks for GBP300bln while the 75th percentile GBP310bln.
- For the FY26/27 remit, the median expectation is GBP280bln (25th percentile GBP265bln, 75th percentile GBP300bln). Note that the last OBR projection put the FY25/26 IGFR (illustrative financing requirement) at GBP270.6bln. This would then need to be adjusted lower for both expected NS&I and bill issuance - which combined are probably GBP10-20bln for most participants). So this would have been remit expectations based on the last OBR update around GBP250-260bln - so the median estimate is around GBP20-30bln higher than that (25th percentile broadly in line and 75th percentile GBP40-50bln higher).
- The full BOE Market Participants Survey is here.
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MNI EXCLUSIVE: Italian government officials discuss the outlook for growth
Italian government officials discuss the outlook for growth and the impact of a strong euro.- On MNI Policy MainWire now, for more details please contact sales@marketnews.com
GERMANY: Government Upwardly Revises GDP Projection
German growth will be 0.2% in 2025, 1.3% in 2026 and 1.4% in 2027 according to the autumn economic projections of the German Economy ministry. These represent upwards revisions from 0.1% and 0.8% for 2025 and 2026 respectively in the last (spring) projection.
- Government expenditure is seen rising 6.1% Y/Y in 2025, 5.1% in 2026 and 2.2% in 2027. These figures are clearly higher than where they stood in the spring projection (which was published on 24 April, so after parts but not all of the recent fiscal expansion were passed in parliament) and may thus drive a decent part of the overall more optimistic growth outlook.
- Full release here: https://www.bundeswirtschaftsministerium.de/Redaktion/DE/Downloads/E/eckwerte-der-herbstprojektion-2025.pdf
- Economy minster Reiche is speaking currently: https://www.youtube.com/live/3uV77lKiqg4
- A reminder that yesterday, the fiscal projection of the German "Stability Council" found that "the Maastricht debt ratio could rise to around 80.25% of GDP by the end of the projection period in 2029" in Germany. This compares with a realised debt ratio
of 62.5% of GDP in 2024.
BUND TECHS: (Z5) Clears Resistance
- RES 4: 129.50 High Aug 5
- RES 3: 129.58 61.8% retracement of the Jun 13 - Sep 3 bear leg
- RES 2: 129.44 High Sep 10 and key short-term resistance
- RES 1: 129.07 76.4% retracement of the Sep 10 - 25 bear leg
- PRICE: 128.97 @ 13:24 BST Oct 8
- SUP 1: 128.25/127.88 Low Oct 7 / Low Sep 25
- SUP 2: 127.61 Low Sep 3 and the bear trigger
- SUP 3: 127.46 1.00 proj of the Aug 14 - 15 - 28 price swing
- SUP 4: 127.13 1.236 proj of the Aug 14 - 15 - 28 price swing
Bund futures have rallied sharply higher today and in the process cleared initial resistance at 128.84, the 61.8% retracement of the Sep 10 - 25 bear leg. The breach signals scope for a stronger recovery and potentially exposes key resistance at 129.44, the Sep 10 high. The next resistance is 129.07, the 76.4% retracement. The Oct 7 low of 128.25, has been defined as a key short-term support.
