Mike will be along with a preview of what to watch from the BoE today, but here is something to be getting along with.
Hitting us at 1200GMT:
1. The rate decision
- Expected to remain unchanged, with the bank rate remaining at 0.5%, & the Asset Purchase Facility at 375b GBP
- Watch the vote though. Last time it was 8 - 1 (McCaffery has been the sole hike guy ... watch for the (admittedly small) likelihood of Weale and/or Forbes to join him) and any shift will indicate changing views amongst the MPC
2. Meeting Minutes are released simultaneously
3. The Quarterly Inflation Report is also released, and attention will be on the forecasts
- The latest forecast (previous report) was for inflation at 2.03% (2 years out) & 2.14% (in 3 years) ... so watch for movements in these ... The background is inflation in the UK is low and has shown very little sign of dragging itself up off the canvas,
- There is, though, potential for the Bank to nudge higher the medium-term inflation outlook if the monetary Policy Committee forms the view that market expectations are too conservative. Any budge higher like this will imply a 'lift-off' rate hike sooner than previously expected and would be a positive GBP input.
- Also watch the growth (GDP) outlook. The Fed last week turned a little more benign on the global outlook.
Then, at 1245GMT, Governor Carney's press conference
-
As you can see, A LOT of information is going to hit at once,,, and it is likely (IMO) to precipitate extreme volatility. The likely direction of GBP may not become clear until after the volatility dissipates. keeping your powder dry may very well be a wise tactic over the announcements etc.
-
ps. If you want more to be getting along with ... there's plenty of reasons here why we may see a more hawkish slant from Carney & Co tomorrow, both in the MPC statement and at the inflation report presser
