BoE: Expect no change in policy - TDS

The analysis team at TDS suggests that it’s a busy day for UK, with another monthly ‘theme day’ this morning on top of the BoE decision at midday.

Key Quotes

“From the Bank of England we expect no change in policy, another single dissent (7-1 vote as Hogg has now resigned) from Kristin Forbes for a rate hike, a repeat of its neutral position, and still some members being close to voting for a hike. While softer GDP and stronger inflation data will shape its 2017 forecasts, the Bank is likely to leave its macroeconomic forecasts largely unchanged in the medium-term. Though we do see scope for an initial, mild hawkish reaction, we would expect Governor Carney to talk markets back toward a neutral position during the press conference.” 

“For this morning’s data, we see upside risks to the IP data, where markets are looking for a -0.4% decline, but we think that we could see a small 0.2% gain instead, and we see small upside risks to construction output with a 0.5% m/m gain (mkt 0.4%).”