6 Aug 2015
Eyes on BoE on super Thursday - RBS
FXStreet (Guatemala) - Analysts at RBS noted that we have the Bank of England who will roll out its new calendar for monetary policy releases starting tomorrow, when the MPC releases not just its August rate decision but also the Quarterly Inflation Report and the August MPC minutes.
Key Quotes:
"While there will be a flood of information released, the initial currency reaction may be most purely linked to the vote total. We expect the BoE MPC to vote 7-2 in favour of leaving rates unchanged, with only the two most established hawks, Weale and McCafferty, ticking the box for a rate increase."
"A Reuters poll of economists revealed this matches the consensus, with the risks perhaps leaning in favour of more dissenters rather than fewer. Any additional dissenters could increase market jitters around a November 2015 rate hike and support the GBP."
"But we worry that the inflation report will reveal lower CPI forecasts and our economists point out in their preview that growth has not significantly outperformed relative to the MPC’s May forecasts. This, along with our view that more restrictive base effects could weigh on wage inflation into year-end, leaves us still favouring a MPC lift off in early 2016 rather than late 2015."
Key Quotes:
"While there will be a flood of information released, the initial currency reaction may be most purely linked to the vote total. We expect the BoE MPC to vote 7-2 in favour of leaving rates unchanged, with only the two most established hawks, Weale and McCafferty, ticking the box for a rate increase."
"A Reuters poll of economists revealed this matches the consensus, with the risks perhaps leaning in favour of more dissenters rather than fewer. Any additional dissenters could increase market jitters around a November 2015 rate hike and support the GBP."
"But we worry that the inflation report will reveal lower CPI forecasts and our economists point out in their preview that growth has not significantly outperformed relative to the MPC’s May forecasts. This, along with our view that more restrictive base effects could weigh on wage inflation into year-end, leaves us still favouring a MPC lift off in early 2016 rather than late 2015."