Analysts at Nomura offered a preview of the BoE MPC decision and Inflation Report (Thurs 1 Nov):
Key Quotes:
“CPI inflation has been volatile since the Bank published its August IR. Its forecasts for July, August and September had been for 2.6%, 2.4%, 2.4% but in the event the numbers came out at 2.5%, 2.7% and 2.4%. Despite this volatility, the most important point to note is the current rate of inflation for September is exactly where the Bank thought it would be three months ago – in other words, the point of departure for the Bank’s November forecast round is exactly as expected.”
“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.”
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