BoE meeting: what to expect?
The Bank of England is widely expected to leave interest rates and QE on hold at 0.5% and at £375 bln respectively on Thursday. The monetary policy decision will be announced today at 12:00 GMT.
The BoE is widely expected to adjust its “forward guidance” policy in February as the jobless rate has fallen unexpectedly rapidly towards the bank's 7.0% threshold. Mark Carney will likely try to correct market expectations as it is not ready to deliver a rate hike in the nearest future. However, on the today’s meeting the bank is quite unlikely to issue a policy statement. The forward guidance is more likely to be adjusted in the Feb. 12 Inflation Report.
Analysts split in their forecasts on how the guidance will be updated: some of them expect the unemployment threshold to be lowered, while the others suggest the bank to focus on a broader range of labor market indicators.
While the central bank is unlikely to make a major policy announcement on Thursday, some analysts are watching for confirmation that the MPC will choose to reinvest the proceeds of government bonds the Bank bought through QE and which will mature before the next meeting in March.