Halister News

(Bloomberg) -- The BOE will simultaneously publish its rate decision and minutes at noon London time.

• Bloomberg’s live blog will start then too
• NOTE: For analyst views, see the research roundup
• Key questions include:

DID THE MPC CUT RATES? ANY CLUE ON NEXT STEPS?

• In August, policy makers said they would likely support a further rate reduction this year
• All economists in a Bloomberg survey see key rate held at 0.25% today as a number of analysts have pushed back their expectation for another cut to November
  • Sixteen of 22 economists in a separate Bloomberg survey predict the MPC will though say another cut this year is still on the cards
  • Carney has expressed caution about lowering rates given the likely impact on bank margins and there’s a global discussion about what easing measures central banks should prioritize in the future

WHAT ABOUT QE, OTHER MEASURES?

• BOE Chief Economist Andy Haldane told The Telegraph newspaper he sees a bigger role for tools other than rates
• Kristin Forbes voted against both corporate and government bond purchases in August; Ian McCafferty and Martin Weale voted against buying sovereign bonds
• Forbes told MPs this month she is “far away” from supporting helicopter money, while Jon Cunliffe said such an option is “outside” his thinking
• Michael Saunders joins the committee, replacing Weale, and his thoughts will be weighed to see if the balance on the MPC has shifted more hawkish or more dovish

HOW SPLIT WERE THE VOTES?

• Most analysts expect the decision to keep policy on hold this month will be unanimous, although Barclays economists say dovish Committee member Gertjan Vlieghe is likely to vote for a cut

WHAT DOES THE BANK SAY ABOUT STERLING?

• GBP remains around the middle of its post-Brexit trading range vs dollar this week, less than 1% lower than on the eve of the bank’s August meeting but ~11% below its YTD peak
• In August, the minutes show rate-setters expected the fall in sterling to lead to a fairly rapid pickup in CPI inflation, spurring it to around the BOE’s 2% target in 1H 2017
• August data showed inflation unchanged at 0.6% y/y, even as it showed a surge in PPI input prices; today’s commentary will be scoured for any changes to the outlook amid falling certainty the bank will ease further

THE ECONOMY

• While economists slashed their forecasts after the U.K.’s decision to leave the EU, the data so far has come in better than the more gloomy forecasts
  • A number of analysts have changed their forecasts again since and no longer expect a recession in the U.K.
  • Governor Carney told MPs this month growth is around half as much as it was prior to the referendum as he explained why the bank’s August easing package was justified