Summary of BOE Surprises/Highlights

Just a quick summary of the surprises/highlights from the BOE this morning:

• We had one forecast projection. There were not multiple scenarios. This suggests MPC members may be less divided than some had thought as they all had to sign off on the projections.
• The recovery looks like a broken V or swoosh, but the 18% bounceback in Q3 is likely to be seen as overly optimistic by a lot of analysts. So although CPI is in line with expectations at the end of the policy horizon, there is scope for the data to miss and that may still mean more QE later this year.
• We heard more about negative rates than we expected. The full review was not fully expected until later this year but it seems as though negative rates are not on the cards in the short term (causing short sterling futures to sell off).
• Gilt purchases are now to be carried out on three days with one operation per day (moving back to the system used before this round of QE began in March). The pace was in line with expectations, however, at GBP4.4bln per week.