BoE: No fireworks expected today – Deutsche Bank

As little as a few weeks ago it looked like the BoE would hike at this meeting with market pricing up towards 90% for a 25bp hike, but that has come all the way back down to 10% now following a string of soft data including CPI and GDP reports and started by some dovish comments from Governor Carney, according to analysts at Deutsche Bank.

Key Quotes

“Our UK economists recently revised their call from a hike to no change at today’s meeting however caveat that the chances of a hike today are likely to be more balanced than current market pricing suggests. In their view the MPC will be reluctant to abandon the hawkish supply-side narrative they have been developing since the middle of last year just yet, particularly as to do so would confirm their November hike as a policy mistake. Our colleagues have also now shifted their view of an opportunistic May hike to August, with June also a potentially live meeting.”