Brexit and growth are two things the Bank of England monetary policy committee will be concerned with at their latest MPC meeting and inflation report

Today we get the second inflation report of the year, which is largely just a monetary policy press conference.

Mike's already nailed the expected outcome of the announcement but it will be the messages on two key events that's going to get prices moving.

Brexit and growth are going to be the main concerns voiced by the press. Brexit will obviously be top of the list. As Mike has pointed out, we know that they stand ready to stabilise markets over the vote by providing liquidity but the market will want to know more about what else they are ready to do in the event of an exit vote. So far we've had analysis that rates will rise or fall on an exit. The Sunday Times ran an article that said the BOE planning to cut rates, while the latest news came from inbound MPC member Michael Saunders who said rates could rise. The issue of possible rate moves over/after the vote is a big deal for the pound and arguments from both sides now just muddies the waters, so we'll be hoping for some clarity today.

Growth

While we inch our way to the referendum vote, the cogs of the country's economy are still turning and the steadily falling trend in quarterly growth won't be ignored. The Brexit issue casts its own shadow over growth and creates a double problem for the MPC. Is growth on the wane due to Brexit or is there a deeper underlying weakness?

The inflation picture will also be up in the air due to Brexit. The last CPI numbers pushed inflation to the highest since Dec 2014 and the core took a sizeable jump also. With oil prices on the rise we're going to start to see inflation pushing up and that will be of comfort to the BOE, though they're likely to downplay that. The forecasts will be another risk area for prices and particularly if there's any significant downgrades.

The problem we have with trading this is that things could be all turned around. While talk of rate hikes at any other time would lift the pound, or cuts send it lower, any hikes would be coming against a backdrop of bad news about an exit, which would be a bigger negative, almost the same could be said if they talk about rate cuts. Changes in the forecasts will need to be assessed against a vote to stay and a vote to leave. The BOE may well deliver some sort of split forecast for both eventualities.

Trading it

Things could get messy, and I don't like messy when trading. As such, I think the best course of action is to take a step back and assess the whole picture. While the pound may jump around during the report I think a more defined move will come at the end. The best way to look at it will be to judge whether the BOE has made a strong enough case that they have the contingency plans in place to deal with any outcome of the vote. Rate hikes, cuts or anything else will be reactionary moves for after the vote. Until then the market will just want to know whether the BOE is ready, willing and able to deal with it. If the market feels they are then that will be supportive of the pound. If they don't inspire confidence then there's only one other way to go.

Carney will try to keep markets calm