Christian Lawrence, FX Strategist at Rabobank think that they fully expect no change in either the base rate (0.5%) or QE (GBP375bn) from the BoE despite the recent dire Q2 GDP growth print and slowing inflation. "Two members of the MPC voted to keep the asset purchase target unchanged at the last meeting when an extra GBP50bn of QE was announced, but this must be taken in the context of other easing measures that the Bank has recently introduced," he said, "the overall tone of the MPC is dovish and the deteriorating macro backdrop in the interim is likely to have amplified this. That said, it will take a total of four months for the Bank to complete its latest round of asset purchases and for now we can expect the Bank to return to ‘wait and see mode’."
Ross Walker, analyst at RBS, also believes that no policy change will be announced in August. The BoE will be "on 'autopilot' until November." he said, "There is little prospect of any further BoE policy activity in August. Our central forecast for the asset purchase target to remain at £375bn is being tested by events at home (ongoing sharp declines in GDP) and abroad (the, as yet, inadequate policy response in the euro area). Whether the BoE sanctions further monetary policy loosening in November 2012/Q1 2013 – in whatever form – appears to be increasingly dependent on the action taken by the ECB and euro area member state governments."
The analysts polled by FXstreet.com for the current edition of the European Central Banks forecast report also believe the BoE should be quiet this month. We'll see on Thursday.