UK: key events for next week - Danske Bank

In the UK, the most important event is the Bank of England meeting on Thursday, including an updated Inflation Report and a press conference, mentioned analysts at Danske Bank. 

Key Quotes: 

“In the UK, the most important event is the Bank of England meeting on Thursday including an updated Inflation Report and a press conference. While economic data have been more or less in line with expectations since the last Inflation Report in November, the market movements are interesting. On one hand, the oil price is now
higher than projected, which should lift the inflation projection in the short-term, while on the other, stronger sterling means lower inflation (but slightly further out).” 

“Overall the net effect is likely around zero. Also markets have priced in around 80% probability of a hike in August and it will be interesting to hear whether the BoE thinks this is appropriate or not. We think the appetite for making a big signal shift at this meeting is low and that the BoE might take a wait-and-see approach, not least now that the Brexit transition talks have begun. Hence we also think the vote to keep monetary policy unchanged was unanimous. Also note that the Bank of England will make some analysis on the supply-side of the economy in the report.”

“The most important data release is the PMI service index for January due out on Monday. Both the Lloyds Business Barometer and the service confidence indicator from the EU survey suggest the service index may have risen marginally. We estimate an increase to 54.6 from 54.2. Service sector growth remains positive but still not as
high as previously in the cycle.”