FXStreet (Mumbai) – Jane Foley, Senior Currency Strategist at Rabobank provides insights in to the upcoming BOE events – ‘Super Thursday’ and expects one and four members of the MPC to indicate a preference for an immediate hike in the Bank rate this month.
Key Quotes:
“In an effort to increase transparency and communication, the BoE will for the first time release the minutes of this month’s MPC meeting to coincide with the policy announcement.”
“To allow time for the minutes to be written, the policy decision will no longer come at the end of a two-day meeting but after talks that will take place the week before in addition to the Wednesday immediately prior to the decision.”
“The latest GfK consumer confidence data and this morning’s industrial production release they will have been enlivened by the Bank’s latest set of economic forecasts which will also be published today as part of the Quarterly Inflation Report.”
“While the Inflation Report is widely expected reflect increased confidence in the domestic economic backdrop, the recent weakness of oil prices is likely to impact the Bank’s long standing view that CPI inflation will recover at the end of this year as last year’s oil price fall drops out of the index.”
“A downward revision to BoE CPI inflation forecasts is possible today and this plays into our view that while the MPC will lay the foundation for an future interest rate hike, that it is still likely to be some months before a the majority of MPC members vote in favour of a rate hike.”
“Sterling strength is another reason why we believe that there is unlikely to be a majority vote at the MPC for a rate hike until next spring.”
(Market News Provided by FXstreet)