The research team at TD Securities expect the BoE’s MPC to vote 9-0 for unchanged policy at Thursday’s meeting.
Key Quotes
“The new forecasts are likely to show relatively little change vs the August forecasts, though we note that risks in our view tilt to the downside for 18Q4 growth. The MPC is likely comfortable with the current slope of the yield curve, which shows about one hike priced in for 2019.”
“Budget Preview: The UK budget is released on Monday, with a vote on Thursday. We expect this year’s large revenue surprise to be carried forward, but spending pledges on the NHS and “ending austerity” are likely to eat up this and more, leaving the overall fiscal picture broadly unchanged. With Brexit (hopefully) around the corner, the government will hold off on any major policy announcements until greater clarity is revealed. For the current fiscal year, we would expect the DMO to scale down the proportion of the “unallocated” Gilt sales which currently stand at £3.6bn and some reduction in the bill stock. Thus, the overall allocations of Gilt issuance across different maturities should remain intact.”
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