Barclays view following the MPC meeting

Now expect GBP50bln QE in Nov

• Barclays state that "the minutes suggest that the BoE remains on alert, if not actively preparing for, the next step." Barclays now expect GBP50bln QE in November (previously forecast no further QE).
• Barclays notes that "letting the QE programme run out in mid-December may lead to market jitters at a time when Brexit and year-end will already likely be sufficiently straining markets and the economy" and also states that this policy should "not see this as a change in stance, but merely a continuation of policies, very much consistent with the difficult macro-economic and political backdrop."
• In an adverse scenario, Barclays think that "excessive Brexit-induced volatility, a disappointing fiscal response and a pick-up in COVID-19 hospitalisation would spur the Bank to deploy more rather than less easing. We would then expect a mix of more QE, more forward guidance and negative rates, with a preference for a lower TFS rate. The timing of such a decision would be at the 5 November, 17 December or 4 February MPCs, albeit announcement and deployment could be decoupled (eg, QE immediately, with lower rates only when conditions are met)."