BoE: PMI readings will likely reinforce the idea that the MPC is on hold - BBH

Analysts at BBH explain that the Bank of England will meet on May 11 and this week's PMI readings will likely reinforce the idea that the MPC is on hold.  

Key Quotes

“Forbes dissented at the previous meeting in favor an immediate hike, but she is unlikely to have convinced any of her colleagues (and her term is almost up).  The PMIs are expected to be softer, but nothing dramatic.  The past decline in sterling and the previous increase in energy prices are still working their way through the system. That means that the risks to inflation are still on the upside.”

“The MPC will view it as likely transitory.  The currency impact and jump in energy prices will drop out of the calculation.  Since the middle of March, sterling has appreciated by 4.5% on a trade-weighted basis while interest rates have softened slightly and the equity market has rallied (FTSE 250 is up about 3.5%).  After softening in earlier in April, financial conditions are back where they spent the past six months.”