TD Securities analysts are expecting the Bank of England’s MPC to leave policy unchanged at their upcoming meeting as Brexit uncertainty continues to dominate the landscape.
Key Quotes
“We expect 2019 growth to be upgraded slightly. Despite a likely upgrade to the MPC’s 19Q1 nowcast, they will probably unwind much of that strength in 19Q2 and leave the GDP forecast broadly unchanged from 19H2 onward (we don’t think the MPC will go as far as a negative q/q GDP print in 19Q2, but it can’t be completely ruled out). Higher 19Q1 growth, even if mostly offset in 19Q2, could mathematically boost 2019 growth to 1.4% (Feb IR: 1.2%).”
“The inflation projection is likely to be left broadly untouched vs the February inflation report, especially in light of the recent price data coming in on top of the MPC’s projection. Wobbles in the near-term GDP data are unlikely to have a sustained impact on inflation, and the shift down in the yield curve will lead to rounding differences at most, leaving Year 2 and 3 inflation roughly unchanged from the MPC’s February forecasts.”
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