Clear the decks at 1200 GMT for the BoE meeting, minutes, inflation report

Earlier previews are here:

And, finally ...

RBC:

  • The MPC is set to leave Bank Rate at 0.5% in February.
  • Updated Inflation Report (IR) projections probably won't result in wholesale changes for GDP and CPI, but ongoing optimism on the global outlook, prospects for pay growth and potential revisions to estimates of slack will have to be factored in.
  • The net result could be that the IR puts less emphasis on some of the downside risks in the economy, but we don't anticipate the market having to significantly re-price for more than the approximate two-and-a-half 25bp hikes already embedded over the next three years.
  • Despite the rising risk that our expectation of no change in Bank Rate in 2018 looks too pessimistic, we maintain the view that the MPC's long-established 'gradual' tightening mantra means the c. 0.50% probability the market ascribes to an H1 2018 hike is overdone

Scotiabank:

  • expect the Bank of England to largely stand pat on 'Super Thursday' when the central bank releases its policy decision and statement plus the Inflation Report.
  • No Bank Rate change is expected ... anticipates a mildly hawkish bias on the path to an expected hike in May.
  • Since the November meeting, markets have tightened financial conditions through pound sterling appreciation and higher bond yields ... but ... GDP growth has been a little stronger than expected and wage inflation has been firming from a recent low of 1.8% y/y last April to 2.4% now which, alongside firming oil prices, all points to somewhat greater conviction that gently higher inflation is on the way.
  • Of course, lurking in the background is ongoing Brexit-related uncertainty on the path toward leaving the EU by March of next year.