BOE to Raise Rates in 1H 2015: Wilson

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May 13 (Bloomberg) –- In an exclusive interview, Goldman Sachs Asset Management International EMEA CEO Andrew Wilson discusses the purpose of the Goldman Sachs Summit, long-term investment ideas and central banks. He speaks exclusively to Manus Cranny from the Goldman Sachs 2014 EMEA Ideas Summit on Bloomberg Television’s “Countdown.” (Source: Bloomberg)


I'm joined by andrew wilson.

The head of the rates business.

Great to have you with us.

Tell me about this summit.

It is the first time that you have done this kind of thing but it brings the clients into the building and gives you guys an opportunity for some things on this agenda.

I think it is a great opportunity.

We have over 30 external experts and over 300 clients signed up.

We're looking at things like what's happening in emerging markets.

They were going through a transition driving growth.

With they going to provide the same growth going forward?

Demographics and of course geo politics.

There is a lot going on around the world.

All of these things talk about your long-term investment idea.

That is what this is about.

Taking a step back looking at your long-term investment ideas.

Does it give the opportunity to think about the big ideas?

Where we are now with central bank policy, it is like herding cats.

We're going in different directions.

The fed on paper.

Bank of japan.

More stimulus to come.

Where are with this diverge answer?

Central banks are providing a lot of liquidity.

We have not come to the point where things are starting to improve.

The divergence rates are likely to be higher than they are now.

You have the bank of japan trying to provide more liquidity.

Draghi was relatively explicit last week talking about the need for further stimulus so that divergence provides a good opportunity for markets and equities.

That is a good thing for us.

One of the things is poised for growth.

Let's focus on europe first of all.

Because there is a trolley of things that he can do in terms of rates.

In terms of liquidity.

This terms of negative rates.

What is he thinking about the most powerful med of avoiding deflation for the e.c.b.? i think they are going to -- this is going to be a step-wide process.

They are going to move along that path you talked about.

Go to negative rates at the next meeting.

Provide more liquidity.

Of course the ultimate -- for draghi is quantitative easing.

That is not going to be just straightforward here.

It has to be an asset-backed program.

Where and how do they nabt a form of q.e. ? -- nabt a form of q.e. ? what form?

It is one of the challenges in europe.


markets are still relatively smile.

Of course buying government bonds has a lot of political issues with it.

The issue of quantitative easing is very complex.

Not a done deal.

If we don't see enough improvement in growth and particularly a turnaround in inflation, i think the e.c.b. will be left with no other alternative.

That is a 2015 story for us.

Not a 2014 story.

If we turn to the u.k., they have a different story.

Mark carney has a different set of issues to deal with.

Sterling-euro at a 16-ip month high.

The rates market is beginning to get nervous.

Is that a fair assumption?

How concerned are you?

Going back to the divergent theme.

U.k. growth is likely to be 3% this year.

That is not an environment where you need lower interest rates.

We see them raising rates in the first half of 2015. the twergence plays out in terms of rate opportunities.

Rates moving higher.

We have low, low inflation.

Growth at 3% is something that george couldn't dream about 18 months ago.

Where are there bubbles?

If you look at the divergent themes . there must be certain asset classes that you're wary of.

Not just in the u.k. but on a global perspective.

I think the amount of liquidity in the system tells you this is a potential for bubbles.

I don't think we look around the world in a concern that there are bubbles.

Equity will produce high digit -- single digit returns and maybe low double digit returns.

The transition from very easy monetary policy to some tighter, still not tight but tighter than it has been having that transition play out in terms of rate markets and credit markets.

That transition.

We have seen one or two testing moments in that.

It is not going to be an easy journey.

Do you envision an emerging market, giving a little bit of space at the moment to put their house in order.

That is my interpretation of it subjectively.

Will they go through another period of adjustment as we go to higher rates in the states and in the u.k.? yeah.

As you point out, the first comment around tapering, from ben bernanke -- a big selloff in emerging markets.

A lot of that money is now washed out.

I think we're in a more sustainable position for emerging markets.

Importantly, though, you need to distinguish between those who are going to do well and those who have to still put their house in order because they have deficits that require funding.

Those companies that require liquidity are going to be under more pressure than those that have good solid growth trajectory.

We look at latin america, mexico, is poised to do very well.

Enjoy your day.

Next time you come back in the studio, we'll hopefully have some movement on those markets.

Back to you, anna, in the

This text has been automatically generated. It may not be 100% accurate.


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