Thursday preview: BoE delivers policy decision, minutes and Inflation Report
The Bank of England is widely expected to keep interest rates unchanged on Thursday when the central bank announces its latest policy decision.
The BoE’s Monetary Policy Committee is once again projected to vote 8-1 on maintaining the benchmark rate at 0.5% amid low inflation and weak global growth. Many see Ian McCafferty remaining the only member of the MPC to vote in favour of a rate hike.
“Whether the Bank of England acts on interest rates at all in 2016 currently looks touch and go,” said Howard Archer, chief UK and European economist at IHS Global Insight.
“Governor Mark Carney’s recent high profile speech indicated that UK growth and inflation since last summer has been weaker than the Bank of England had expected, and the conditions are not in place for an interest rate hike. His speech fuelled the view that the Bank of England could sit tight on interest rates through 2016.”
Since the MPC is not expected to deliver any surprises, focus will be on the minutes of the February policy meeting and the Inflation Report for clues on the timing of the first interest rate increase.
The Inflation Report will be of particular interest as it outlines the outlook for the economy and inflation.
“While the near-term UK growth and consumer price inflation outlook has weakened, of key importance will be has the Bank of England become more downbeat about the longer-term outlook?,” Archer said.
Thursday 04 February
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