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The GBP/USD pair has dipped under 1.36 ahead of the Bank of England’s Interest Rate Decision and the Asset Purchase Facility due out at 12:00 GMT. The BoE is set to leave its policy unchanged and publish its Monetary Policy Report and as we get closer to the release time, here are the expectations forecast by the economists and researchers of seven major banks.

Furthermore, Governor Andrew Bailey will likely comment on the BoE’s review of negative interest rates, the outlook for the economy and Britain’s successful vaccination campaign. 

See – GBP/USD to find support ahead of 1.35 – Westpac


“We expect no change in the policy rate and no clear signal at negative rates (which we now see as even less likely than earlier in the year given the relatively fast vaccination process in the UK). Although the BoE may formally lower its estimate of the lower bound to below zero next week, we don’t expect policymakers to hint that negative rates are imminent (particularly if the UK economy is set to start recovering from 2Q onwards), in turn having a limited impact on GBP.”


“The upcoming BoE meeting should see monetary policy left on hold but downgraded macro forecasts and an update to its thinking on negative interest rates. We think that the BoE’s conclusions are likely to conclude that while negative interest rates should be part of the toolkit, and that the lower bound for Bank Rate is now below zero, negative rates are not imminent and are unlikely to be implemented in the current economic cycle.”

Capital Economics

“The prospect of a rapid recovery in GDP in the second half of the year and a rebound in inflation to 2% suggests that the third COVID-19 lockdown won’t prompt the Monetary Policy Committee to launch a fourth increase in quantitative easing. And although the MPC will probably confirm that it is moving closer to being able to use negative interest rates, we think it will disappoint the markets by not implementing them either this year or next.”


“We expect the BoE to leave the policy rate at 0.10%. We also expect the central bank to stay the course on its asset purchases. The votes are likely to be unanimous, too. Even as the news on the future UK-EU relationship and the speedy rollout of the vaccines has been positive since the previous meeting, it seems inevitable that the MPC will downgrade its near term outlook due to the current national lockdown. However, the aforementioned factors should allow the MPC to look beyond the near-term risks and to focus on the trajectory of the recovery. We expect the MPC to strike a fairly confident note, as they have done over the last couple of months. We should also hear more about the review on negative interest rates. We think that, as in August last year, the findings will predominantly highlight the potential drawbacks and challenges of such a policy. This may damp any market expectations of a near-term rate cut.”


“Sharp downward revisions to the growth forecast for 2021 are unavoidable, but we still expect the Bank to remain relatively optimistic on the recovery, forecasting the dissipation of excess supply by mid-2022. The Bank Rate is expected to stay at 0.1% and asset purchases at £895 B. We still expect a 20bp rate cut to -0.1% but in August at the earliest. For now, it seems the MPC’s main aim is to guard against a premature rise in yields in the front-end – by keeping negative rate possibilities alive (but not necessarily implementing them).”

Deutsche Bank

“The MPC is likely to deliver a dovish message, and they see the Bank formally including negative rates in its toolkit, which should lower the bar for further rate cuts. However, no policy changes are expected at this stage, with a unanimous vote from the MPC to keep rates unchanged. Beyond this meeting, their base case is that the MPC will stay on hold for the rest of this year, though risks remain from a longer-than-expected lockdown or a disappointing recovery.”

Danske Bank

“We do not expect any policy changes and all focus is on any signals on whether the BoE considers cutting into negative or not. We expect the BoE to refrain from cutting but keep the possibility open.”