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Analysts at Deutsche Bank point out that today we’ve got the last of the three central bank meetings to look forward to with the BoE decision due out just after midday.  

Key Quotes

“The wide expectation is that the BoE will hike by 25bps to 0.75% which would mark just the second rate hike by the BoE since 2007. It would also break a run of 113 consecutive months that the Official Base Rate has been stuck at 0.50% or below.”

“Our UK economists share the view that the BoE will hike today before holding pat for the rest of the year. Our colleagues do not expect today’s decision to be unanimous however and would not be surprised if Deputy Governor Cunliffe dissented, perhaps leaving open the door for one or two more of his committee to join suit. So it’s more likely that this will be a dovish hike.”

“One interesting takeaway from today’s MPC meeting will be the Bank’s view on the neutral rate. Our economists’ expectations is for the BoE estimate of the r-star to be somewhere between -0.25% and 0.50%, with the risk that it would be at the higher end of the range.”

“We’ll also get the Bank’s latest inflation forecasts so that will be worth keeping an eye on too.”