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BOE: ###POV: POTENTIAL FOR HAWKISH BIAS BUT WAITING FOR BREXIT
- With the UK economy at full capacity, most dealer previews of the BOE MPC's
decision Thursday (midday GMT) point to the view that were it not for Brexit the
MPC would be hiking rates now.
- However, Brexit remains very much a live issue, and as such most expect the
BoE to hold off on any big changes to guidance until after the deal (assuming
there is one), or forecasts until the Feb or even May Inflation Reports.
- The vote is expected to be 9-0 to leave Bank Rate on hold, although some have
pointed to Ben Broadbent as a potentially hawkish dissenter.
- It is likely that the MPC reiterate "an ongoing tightening of monetary
policy...would be appropriate" and that "any future increases in Bank Rate are
likely to be at a gradual pace and to a limited extent."
- With MNI PINCH suggesting that markets are pricing only a 50% chance of a rate
hike by the November 2019 meeting, we believe that there is decent risk/reward
in positioning for a more hawkish report.
- For full preview, including bank summaries: https://tinyurl.com/MNI-BoE-Nov