BOE: Expect no changes to monetary policy – Nomura

Analysts at Nomura are out with a brief preview of what to expect from the Bank of England (BOE) Super Thursday due at 1200 GMT.

Key Quotes:                                              

“We do not expect any changes to monetary policy.

Risks to its economic growth forecasts look to be to the downside.

Near-term inflation is set to be revised down on account of lower energy prices, but what's more important from a policy perspective is where the MPC sees inflation at the two- and three-year horizons. 

In November 2018 it expected inflation to settle around 2.35-2.40% based on no change in monetary policy, which we judged would be consistent with around two 25bp rate rises per year. Much will, of course, depend on Brexit. 

The Bank can realistically continue to base its forecasts on a "smooth adjustment to the average of a range of possible outcomes for the UK's eventual trading relationship with the European Union", though this may be the last time it can do this - depending on how the negotiations (with both the EU and the House of Commons) proceed in the coming weeks.”