I did a search but didn't see any preview from the chaps of the Bank of England meeting announcement today (Thursday) ... so here's one from down under!
The Bank of England announces
- Its interest rate decision
- The minutes from the policy meeting
- And the Quarterly Inflation Report
A three-in-one, that's why its called Super Thursday.
- All three come at 1200GMT
- Governor Carney's press conference follows at 1230GMT
1. On interest rates - the Bank is pretty much unanimously expected to keep rates unchanged (0.25%) and the asset purchase target at £435bn (I have seen just one analyst expect the target to lower).
It is worth noting the UK economy is showing better than expected signs:
- Growth is stronger than it was expected to be after the yes vote on Brexit. There are plenty of expectations around for slower growth ahead as the impacts of Brexit become clear, but these have not been evident in the official data. I'll admit to being in 'you are all doomed, just you wait' camp, but the evidence so far has been opposite this (i.e. don't listen to me!). Yesterday I posted the view of the UK's National Institute of Economic and Social Research - they are pretty much of the same view as me, & they've been eating humble pie too: NIESR has progressively revised up its short-term estimates for British economic growth since the referendum, thanks in large part to consumers who kept on spending
- Unemployment is falling (at an 11-year low if I recall correctly)
- Inflation is ticking higher, and will perhaps overshoot the topside target (2% is the target). BoE Governor Carney is on record as saying the bank will not be overly tolerant of an inflation overshoot.
Despite these better signs the Bank is expected to be remain in 'wait and see' mode, watching more data, especially on business activity and consumer spending. In November Governor Carney said the Bank had a neutral policy bias, so I'd expect a clear indication of a shift in the bias before any policy move on rates or QE. This (a shift in policy bias) is something to watch for from the Bank today.
2. The minutes will be scoured for hints of how the Monetary Policy Committee members voted and reasoned, looking for signs for the future direction on rates and QE
3. The Quarterly Inflation Report will be a big key focus. It will include the BoE's latest forecasts for growth & inflation. The most recent Bank update to these forecasts was way back in November;
- the GDP forecast was 2.2% for 2016
- 1.4% 2017
- 1.5% 2018
- 1.6% 2019
Watch for an upgrade to GDP forecasts - this seems likely.
On inflation, the November forecasts:
- 1.3% 2016
- 2.8% 2017
- 2.7% 2018
- 2.5% in 2019
Watch for a change to inflation forecasts - given the continuing low level of GBP since the previous round of forecasts a boost to the 2017 forecast appears likely, at least (As an aside, there may be an impact from the higher price of oil we've had since December, although the price is only a little higher than it was in the June - November period of 2016).
Never mind all that! Its all about me! Tune in for my 1230 press conference.
And, Eamonn, you really need to update your photo file.
