BoE Preview: 7 Major Banks expectations from November meeting

Today, we have an all-important BoE meeting and as we get close to the decision timings, here are the expectations as forecasted by the economists and researchers of 7 major banks for the upcoming meet.

Most of the researchers and economists expect the BoE to announce no change in its policy setting today but suggest that the attention will be on the accompanying Inflation Report. In addition, they suggest that the focus will be squarely on the minutes and in particular the tone and language used.

Deutsche Bank

Today we will see the BoE meeting at lunchtime. Neither we nor the market are expecting any policy changes with rising external risks and lack of clarity on a transition deal however our UK economists do expect Governor Carney to talk up market pricing of a rate hike next year on the back of stronger wage and output growth in Q3 which should make him sound marginally hawkish. As far as the inflation report is concerned only marginal tweaks are likely compared to the September forecasts.

Danske Bank

In the UK, we do not expect any policy changes at today’s Bank of England (BoE) monetary policy meeting. However, attention will be on the accompanying Inflation Report, the minutes and Governor Mark Carney’s press conference.

Nordea Markets

In the UK, a big week is coming up as the Bank of England will meet on Thursday, and the quarterly inflation report is published at the same time. We think the Bank of England will opt for a cautious approach given the huge number of what-ifs due to the Brexit uncertainty. But don’t rule out a slight hawkish twist also from the Bank of England in line with recent signals seen elsewhere in G10.

ING

In terms of the Bank of England meeting, we’re likely to see a unanimous vote to keep policy unchanged next week, and we don’t expect a rate hike before May 2019 at the earliest. But having stayed relatively quiet on Brexit risks at recent meetings, probably the most interesting question for markets next week will be whether Governor Carney voices greater concern about the short-term outlook.”

TDS

We expect the MPC to vote 9-0 for unchanged policy at Thursday's meeting. The new forecasts are likely to show relatively little change vs the August forecasts, though we note that risks in our view tilt to the downside for 18Q4 growth. The MPC is likely comfortable with the current slope of the yield curve, which shows about one hike priced in for 2019.

Nomura

We do not see much need for the BoE to alter its policy guidance in November. Brexit remains a sizeable risk, and while economic growth could surprise on the upside in Q3, weaker global growth and recent market moves could be negative further out. We see the Bank sticking with a similar inflation profile as in August. More hawkish members may position themselves to vote for a rate rise in early 2019, Brexit notwithstanding.

Westpac

Since the September policy decision, there have been mixed developments. Economic activity is continuing to expand at a moderate pace and unemployment remains low. However, inflation has eased back more than expected, and the slow pace of Brexit negotiations continues to cloud the outlook. Against this backdrop, we expect the BOE to remain on hold in November. The accompanying statement is likely to retain a very gradual tightening bias from September, but more weight may be given to uncertainties around the economic outlook.