BoE: Expect the vote to show a 7-1 split in favour of unchanged interest rates – Lloyds Bank
|In view of the analysts at Lloyds Bank, the focus for today will fall squarely on the latest policy announcement from the Bank of England.
Key Quotes
“External MPC member Kristin Forbes will probably continue her hawkish dissent in favour of an immediate interest rate hike. However, given the greater-than-expected slowdown in GDP growth in Q1 and continued signs of moderate wage growth, in our view, it is unlikely that she will be joined by any other member. With the size of the MPC reduced to eight members following the departure of Charlotte Hogg last month, we expect the vote to show a 7-1 split in favour of unchanged interest rates.”
“The accompanying release of the Bank’s Quarterly Inflation Report is likely to reaffirm that the committee remains in wait and see mode for now. CPI inflation over Q1 as a whole overshot the projections made in February, which is likely to force an upward revision to the 2017 CPI projection. However, the impact on the inflation projections for 2018 and 2019 is likely to be limited, not least due to the near-3% rise in sterling since the last Inflation Report, but also the downside surprise to GDP growth in Q1, which could see the Bank revise down its economic growth projection for this year. At the press conference, however, BoE Governor Carney is likely to again stress a ‘limited tolerance’ to above target inflation.”
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