Bernanke Review Due At Midday

The Bank of England is due to release Ben Bernanke's review of the BOE's forecasting for monetary policy making and communication on Friday at midday BST (13:00CET / 7:00ET).

• Although we do not expect the release itself to be instantly market moving, communication at future MPR rounds could be different - although it is still questionable how long it will take to implement Bernanke's recommendations.
• An FT article last week noted that one of the recommendations will be to remove fan charts from the MPR and replace them with more comprehensive alternative scenarios. The fan charts (which are calculated under both "market rate" and "constant rate" profiles) are the Bank's main communication device in the MPR - with the February fan charts showing that the Bank thinks rates will need to be reduced (as inflation falls below target by the middle of next year) but not by as much as market pricing suggests (with inflation around target in mid-2026 and then below target thereafter).
• We would still expect to see fan charts in the May MPR - so a change earlier than that would likely be a surprise and allow potentially a bigger pivot to policy in May. If there is scope to introduce some of the new metrics in August - that could potentially help to delay the first cut (which we think still looks to be most likely in June or August) until August, to be accompanied by some new communication.
• The market will probably not be able to make much of a judgment on any recommendations regarding alternative scenarios until the plans are more fleshed out and see in practice, but any introduction of the dots would be of definite interest to market participants (but current MPC members haven't seemed keen in the past).