###POV: WILL BOE PUSH BACK AGAINST CURRENT....>

SONIA: ###POV: WILL BOE PUSH BACK AGAINST CURRENT PRICING OF SONIA CURVE?

- Thinking is that the inflation report will be a little bit more optimistic

with upward revisions to growth and inflation and with Carney likely to be

shying away from directing markets on rate expectations and the outside

possibility there will be one dissenter calling for a rate hike on Thursday,

markets looking for a push back on current pricing may be found wanting.

- Ahead of Feb BoE MPC meeting, MNI PINCH calculate markets pricing a near 60%

chance of a 25bp rate hike at May MPC meeting up from 43% seen at the beginning

of the year. Some analysts are also mentioning the May meeting as the next

possible time the BoE could raise rates, although highlight uncertainty sounding

the agreement on Brexit transitional deal in March as key factor in BoE

decision. In total, markets are pricing 62.5bps (2.5 x 25bp hikes) of rate hikes

by the end of 2019 more than the 2 hikes over 3-years the BoE highlighted at

last November's meeting.

- The question is will the MPC, or Governor Carney in the press conference, push

back against this pricing or will they let the market decide for themselves?