6 Feb 2014
Flash: BoE unlikely to change policy - Danske Bank
FXStreet (Barcelona) - Sverre Holbek, Senior Analyst at Danske Bank feels that the Bank of England is unlikely to change policy measures but may adopt a more qualitative form of forward guidance.
Key Quotes
“The Bank of England will likely keep policy measures unchanged at today's meeting but the debate on the future of forward guidance is pertinent and the February Inflation Report (IR) (to be released next week) could be instrumental in setting the course for policy ahead.”
“There is a small chance that the MPC might release a statement even if no changes to policy are made to prepare the market for a shift in stance in the IR. In that case, we expect a repeat of the message from the January minutes and from Carney’s Davos speech underlining ‘no immediate rate hike’, that the eventual move will be ‘gradual’ and that the MPC will consider a ‘range of options’ to update guidance.”
“On the whole, we think it is likely that the MPC may adopt a more qualitative form of forward guidance (similar to the Fed) and thus shift focus to a wider range of economic indicators going forward. This could weigh on GBP in the near term.”
Key Quotes
“The Bank of England will likely keep policy measures unchanged at today's meeting but the debate on the future of forward guidance is pertinent and the February Inflation Report (IR) (to be released next week) could be instrumental in setting the course for policy ahead.”
“There is a small chance that the MPC might release a statement even if no changes to policy are made to prepare the market for a shift in stance in the IR. In that case, we expect a repeat of the message from the January minutes and from Carney’s Davos speech underlining ‘no immediate rate hike’, that the eventual move will be ‘gradual’ and that the MPC will consider a ‘range of options’ to update guidance.”
“On the whole, we think it is likely that the MPC may adopt a more qualitative form of forward guidance (similar to the Fed) and thus shift focus to a wider range of economic indicators going forward. This could weigh on GBP in the near term.”