MNI Global Morning Briefing: BOE, Norges In Focus

After the Fed's confirmation of a move to taper its bond purchases, the Norges Bank -- who hikes in September -- and the Bank of England announce their latest policy decisions. Ahead of the main central bank outcomes hitting the wires, the euro area services PMI data is set for publication -- a day later than in a normal cycle due to the Nov 1 holiday.

BOE Has Hike In Sights (1200 GMT)

The Bank of England could choose its November meeting to carry out a rate hike it has signalled is coming soon as inflation spikes, but it is also likely to try to dampen market expectations of the pace and magnitude of tightening likely next year when it makes its announcement on Thursday, our London correspondent writes.

While it is possible an expected 15-basis-point hike will wait until December, the difference between acting now or later will be minimal if next month's increase is clearly signalled in the minutes and by Governor Andrew Bailey.

But the Bank's updated forecasts could push back against large-scale repricing of market expectations, which now indicate a very high probability of four hikes by mid-2022, with Bank Rate rising from its current 0.1% to 1.25% by the end of next year. Monetary Policy Report forecasts could show inflation undershooting target two and three years ahead on market rate curves, while overshooting on constant rates, justifying more tightening but not to the extent priced-in.

A split vote for a hike, or arguments from some MPC members expressing reservations about tightening, could also help bring the whole rate curve lower.

Norges Bank set for December hike (0900 GMT)

As policymakers at other central banks fuel market volatility with signals over future tightening Norges Bank looks set to continue along its pre-planned path, with its November meeting this week a stepping-stone to a December hike.

In its announcement on Thursday, the Norwegian central bank's Monetary Policy and Financial Stability Committee is likely to reassert guidance for a 25-basis-point hike in the final month of the year provided in September, when it initiated this cycle's tightening with an equally well-flagged move in the policy rate from zero percent to 0.25%.

Norges Bank's projected rate of tightening foresees a gradual rise in the policy rate to around 1.7% at the end of its three-year horizon. Its next forecast round is in December.

Central bank speakers Thursday include BOE Governor Andrew Bailey, speaking after the central bank's November policy decision announcement. Fed Governor Randy Quarles is also slated to speak.