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BOE Carney

The expectation is for the central bank to stay on hold but also retain their current forward guidance of "limited and gradual" rate hikes. The inflation report should also show some moderation in growth forecasts but one of the more pressing questions will be how will they view inflation in light of the pound's recent downfall?

On a trade-weighted basis, the pound has fallen by about 4% since the BOE's last inflation report back in May. As such, it presents a bit of a conundrum with potentially faster inflationary pressures in the short-to-medium-term.

At the same time, the central bank is also dealing with economic growth that looks set to decline further and potentially fall into a technical recession. That is not the kind of headache any central bank head would like to have.

However, I reckon the central bank will still allude to Brexit risks being the key factor in their outlook and forecasts. As such, be wary of their wording and whether or not they still view a smooth Brexit scenario as being their baseline as well as their current view on the risks associated with a no-deal Brexit outcome.

Other than that, watch out for Carney's language about international developments and how serious a threat it would pose towards the central bank's future decision.

As it stands, markets are expecting the BOE to tilt slightly to the dovish side with money market pricing already showing a rate cut starting to be priced in for the year ahead:

BOE curve

In this regard, just be mindful about Carney's comments as to whether or not there are any discrepancies between the market pricing and the BOE's view on the future rate path. That will be a giveaway for markets to react to any signals from the central bank.