I posted on 'Super Thursday' here: Bank of England's 'Super Thursday' coming up (on Thursday :-D)
On Thursday (d'uh) we get the Bank of England's interest rate decision,
- And the simultaneous release of the MPC meeting minutes
- And the August Quarterly Inflation Report
- AND a following press conference
Super!
More from Goldman Sachs, this via eFX, 3 key points to watch:
First, GS expects policy to remain unchanged, and that two - possibly three - MPC members will have voted for a rate rise.
Second, GS expects that the projected path for near-term inflation will be revised lower as part of the inflation 'fan chart', but that the risks around the central case will no longer be skewed to the downside, on account of the pick-up in wages.
Finally, GS expects the Bank's two-year inflation projection to be close to the 2.0%, and the three-year projection to remain above the 2% target, encouraging a steeper path for forward rates.
"Taken together, we expect this outcome to be a modest positive for Sterling, as the Bank signals that on a medium-term horizon, the UK economy is building inflationary pressures that can outweigh the drag on inflation from a stronger currency. As we recently showed, while a revision of the inflation path lower in the near term will signal no urgent need to hike rates, a steeper curve is likely to be currency positive, particularly as market pricing has become more dovish in recent sessions," GS concludes.
GS continues to see EUR/GBP falling further and forecasts 0.65 in 12 months.
