In the UK, the most important event is the Bank of England (BoE) meeting on Thursday. Expectations are for the central bank to keep interest rates on hold for the 85th month in a row. BoE is likely to maintain the Bank Rate and stock of purchased assets unchanged at 0.50% and GBP375bn, respectively.
On a global front headwinds have picked up, in particular demand from the Emerging Markets is struggling. BoE also revised its growth forecasts lower to 2.2% for this year from 2.5% in the Nov report. Inflation developments too have been disappointing recently. February inflation report suggested it might take another 2 years for UK inflation to return to its target.
“Weaker-than-anticipated inflation, lingering uncertainty in global financial markets and concerns about the impact that the EU referendum is having on the real economy means that this month’s interest rate decision is likely to be another unanimous one to keep interest rates on hold.” said Paul Hollingsworth, UK economist at Capital Economics.
“Anything else than a 9-0 vote for unchanged interest rates … will be a major surprise,” said Howard Archer, chief UK economist at IHS Global.
The material has been provided by InstaForex Company – www.instaforex.com