46 days ago • Posted by Jasper Lawler
Bank of England 'Super Thursday' Preview
- BoE rate decision, minutes & MPR due 6th May 2021 at 12:00BST/07:00EDT. - Press conference due at 13:00BST/08:00EDT
- Base Rate and APF set to be held at 0.1% and GBP 895bln respectively
- Focus for the release will likely fall on any scaling back in weekly Gilt purchases
Previously, the MPC had guided towards not reducing its balance sheet until the Base Rate hit 1.5%. However, commentary from Governor Bailey has leaned towards reducing the balance sheet before lifting rates on the basis that doing so would give the MPC more scope to expand the balance sheet during a future crisis.
Credit Suisse (SIX:) notes that a definite conclusion to the Bank's tightening sequencing is unlikely at this stage, however it will be important to monitor over the coming months.
UBS expects the accompanying economic projections to reveal an upgrade to the 2021 GDP forecast from 5% to above 6% on account of "a somewhat faster-than-expected pace of easing in mobility restrictions, new policy announcements at the Spring Budget, including the extension of the furlough scheme, and the substantial US fiscal stimulus package". The Swiss Bank expects 2022 and 2023 projections to be left broadly unchanged at 7.25% and 1.25% respectively.
On the inflation front, forecasts are set to see little in the way of material changes with HSBC expecting a minor downgrade to the 2021 forecast to 1.7% from 1.9% with 2022 and 2023 left at 2.2% and 2.0% respectively.