Goldman Sachs: Upside Growth Risks To Outweigh Policy And Politics

Goldman Sachs note that "we expect few policy changes at this week's BoE meeting despite upward revisions to growth given the strong rebound in activity in Q1. In particular, we do not expect a tapering of the pace of asset purchases at the May meeting, instead expecting a shift to come in August. The Scottish parliamentary elections will also be held on Thursday, which will be in focus given the SNP's possible call for a second Scottish independence referendum. While an eventual referendum may constitute a downside risk to growth and upside risk to inflation, for example through possible trade frictions, we do not expect the election itself to provide much additional news to the market. We expect EUR/GBP to remain range-bound for the time being."