UK: BoE, CPI and jobs data to be offset by Brexit developments – Danske Bank

Data to be released next week includes the jobs report and inflation. It will also be the Bank of England meeting. Brexit related events will likely offset economic numbers. According to analysts from Danske Bank, next week at the EU summit (Thursday and Friday), EU 27 will accept the extension of Article 50.  

Key Quotes:  

“In the UK, the most important event is the EU summit on 21-22 March, where the EU leaders have to respond to both UK’s refusal of the new Brexit deal and proposal of extending Article 50. While EU leaders are clearly annoyed by Brexit, as they also have other issues to deal with, it is probably more problematic for the UK to kick the can further down the road. However, given the size of May’s defeat, EU leaders will discuss whether they prefer to offer a long extension.”

“We do not expect the Bank of England to change policy or send new signals at its meeting concluding on Thursday. The Bank of England seems in no hurry to raise rates in the current environment with weaker UK data, slower growth in rest of Europe and high Brexit uncertainty. Our case for a rate hike in November 2019 is under pressure given our new call that the ECB will be on hold for at least 12 months.”

“In terms of economic data releases, we have a few interesting data releases including the jobs report for January and CPI inflation in February.”