Meeting documents
Cabinet
Wednesday, 8th February, 2006
APPENDIX 3
INTEREST RATE FORECASTS
The data below shows a variety of forecasts published by a number of institutions. The first three are individual forecasts including those of UBS and Capital Economics (an independent forecasting consultancy). The final one represents summarised figures drawn from the population of all major City banks and academic institutions.
The forecast within this strategy statement has been drawn from these diverse sources and officers' own views.
1. INDIVIDUAL FORECASTS
Sector View interest rate forecast - January 2006
|
Qtr 1 2006 |
Qtr 2 2006 |
Qtr 3 2006 |
Qtr 4 2006 |
Qtr 1 2007 |
Qtr 2 2007 |
Qtr 3 2007 |
Qtr 4 2007 |
|
|
Base Rate |
4.50% |
4.25% |
4.25% |
4.00% |
4.25% |
4.50% |
4.75% |
4.75% |
|
5yr Gilt Yield |
4.00% |
4.00% |
4.00% |
4.25% |
4.50% |
4.75% |
4.75% |
4.75% |
|
10yr PWLB rate |
4.25% |
4.25% |
4.50% |
4.50% |
4.75% |
4.75% |
4.75% |
4.75% |
|
25yr PWLB |
4.25% |
4.25% |
4.25% |
4.50% |
4.50% |
4.75% |
4.75% |
4.75% |
|
50yr PWLB rate |
4.00% |
4.00% |
4.00% |
4.25% |
4.25% |
4.5% |
4.5% |
4.5% |
UBS Economic interest rate forecast - January 2006
|
Qtr 1 2006 |
Qtr 2 2006 |
Qtr 3 2006 |
Qtr 4 2006 |
Qtr 1 2007 |
Qtr 2 2007 |
Qtr 3 2007 |
Qtr 4 2007 |
|
|
Base Rate |
4.50% |
4.50% |
4.50% |
4.50% |
4.50% |
4.50% |
4.50% |
4.50% |
|
10yr PWLB rate |
4.25% |
4.35% |
4.45% |
4.55% |
4.60% |
4.60% |
4.65% |
4.65% |
|
25yr PWLB rate |
4.15% |
4.45% |
4.55% |
4.65% |
4.70% |
4.75% |
4.80% |
4.85% |
|
50yr PWLB rate |
4.05% |
4.45% |
4.61% |
4.74% |
4.80% |
4.86% |
4.91% |
4.97% |
Capital Economics interest rate forecast - January 2006
|
Qtr 1 2006 |
Qtr 2 2006 |
Qtr 3 2006 |
Qtr 4 2006 |
Qtr 1 2007 |
Qtr 2 2007 |
Qtr 3 2007 |
Qtr 4 2007 |
|
|
Base Rate |
4.25% |
4.00% |
4.00% |
4.00% |
4.00% |
4.00% |
4.00% |
4.00% |
|
5yr Gilt Yield |
4.10% |
4.00% |
3.90% |
3.80% |
4.00% |
4.10% |
4.30% |
4.40% |
|
10yr PWLB rate |
4.25% |
4.15% |
4.25% |
4.35% |
4.55% |
4.75% |
4.85% |
4.75% |
|
25yr PWLB rate |
4.25% |
4.25% |
4.35% |
4.45% |
4.45% |
4.55% |
4.65% |
4.65% |
|
50yr PWLB rate |
3.95% |
3.95% |
4.05% |
4.15% |
4.15% |
4.25% |
4.35% |
4.35% |
2. SURVEY OF ECONOMIC FORECASTS
HM Treasury - December 2005 summary of forecasts of 26 City and 14 academic analysts for Q4 2005 and2006. (2007-2009 are as at November 2005 but are based on 18 forecasts)
|
Independent forecasters |
Quarter ended |
Annual average repro rate |
|||
|
Qtr 4 2005 |
Qtr 4 2006 |
Ave. 2007 |
Ave. 2008 |
Ave. 2009 |
|
|
BoE Base Rate |
4.49% |
4.29% |
4.39% |
4.54% |
4.60% |
|
Highest base rate |
4.55% |
5.00% |
5.40% |
5.90% |
6.20% |
|
Lowest base rate |
4.20% |
3.50% |
3.75% |
3.75% |
3.75% |