BoE: MPC meeting expected to conclude with the main policy settings remaining unchanged – RBC CM
The research team at RBC Capital markets explains that the BoE’s May MPC meeting is expected to conclude with the main policy settings remaining unchanged as a 7-1 vote on Bank Rate is anticipated, with Forbes likely to maintain her call for a hike (though the risk is a move to 6-2).
Key Quotes
“Since the February Inflation Report, growth has disappointed expectations a little and inflation has exceeded the Bank’s forecast a little. This makes the trade-off faced by the MPC trickier, but we expect that the core neutral stance will hold this time.”
“That means the MPC is likely to continue to tolerate a forecast for above-target inflation by exercising the flexibility in its remit to have due regard for the risk that a quicker return of inflation to target could trigger undesirable volatility in output and employment. The main risk for GBP is any mention in the press conference of the 2.5% (TWI) appreciation of GBP since the last Inflation Report being unwelcome.”
Author
Sandeep Kanihama
FXStreet Contributor
Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.
