UK Prel. Data Forecasts: September BOE MPC Policy Decision

By Jamie Satchithanantham

     LONDON (MNI) - No major surprises are expected from policymakers at the MPC

meeting scheduled for September 13 (minutes/decision published September 14),

according to the 12 analysts polled in our preliminary forecast poll. 

     All twelve expect the Committee members to keep the Bank Rate unchanged at

0.25%, as with its stock of assets -- Gilts (stg435bn) and Corporate Bonds

(stg10bn).

     Exchange rate induced rise in prices and an historically tight labour

market continue to test MPC's member's tolerance of above-target inflation, but

the general view of analysts is that the data seen since the last meeting in

August would not have done much to convince them to start a tightening cycle.

     Of those who expressed a forecast for the Bank Rate vote, all see it at

7-2, presumably with Ian McCafferty and Michael Saunders again the dissenters.

     Both McCafferty and Saunders have gone on record defending their hawkish

stance and they are not expected to flip back to the dovish side of the table. 

     That means eyes will be fixed on two other committee members -- Andy

Haldane and Dave Ramsden.           

     Earlier this summer, BOE Chief Economist, Haldane, voiced his opinion that

rates could be hiked before the close of the year. This excited markets given it

came only a day after Governor Mark Carney dampened speculation of a hike. 

     "Provided the data are still on track, I do think that beginning the

process of withdrawing some of the incremental stimulus provided last August

would be prudent moving into the second half of the year," said Haldane in a

June 21 speech.

     Haldane ultimately voted to keep the Bank Rate unchanged as he had not seen

the pickup in wages he would have like to have seen and conceding there was

still "some chance" of a sharper-than-expected slowdown in the economy.

     Ramsden, on the other hand, is more of an unknown quantity and having only

started his tenure as the Bank's Deputy Governor of Banking and Markets on

September 4. According to city analysts, he is seen voting with Carney in

keeping the Bank Rate unchanged. 

     As the Treasury's chief economic advisor, Ramsden has ample experience with

central banking matters, having previously advised current and former

chancellors Philip Hammond and George Osborne on the government's austerity

package following the crisis. 

     Thus with talk the potential unwind of QE gaining traction, not only in the

UK but across other advanced economies, Ramsden's introduction to the MPC may

see communication on this subject increase.                

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                           Sep             Sep              Sep              Sep

                           BOE             BOE              BOE              BOE

                    MPC Policy      MPC Policy       MPC Policy       MPC Policy

                      Decision        Decision         Decision         Decision

                                Gilt Purch Stg

                   Bank Rate %             bln       Unch. Vote        Hike Vote

Date Out                14-Sep          14-Sep           14-Sep           14-Sep

Median                    0.25           435.0              7.0              2.0

Forecast High             0.25           435.0              7.0              2.0

Forecast Low              0.25           435.0              7.0              2.0

Standard

Deviation                  0.0             0.0              0.0              0.0

Count                       12               8                5                5

Prior                     0.25           435.0              6.0              2.0

ABN Amro                  0.25           435.0              N/A              N/A

Berenberg                 0.25           435.0              N/A              N/A

Commerzbank               0.25             N/A              N/A              N/A

HSBC                      0.25           435.0              N/A              N/A

Investec                  0.25           435.0              7.0              2.0

LBBW                      0.25             N/A              N/A              N/A

Nomura                    0.25           435.0              N/A              N/A

Oxford

Economics                 0.25           435.0              N/A              N/A

RBC                       0.25           435.0              7.0              2.0

Scotia                    0.25             N/A              7.0              2.0

Standard

Chartered                 0.25             N/A              7.0              2.0

UniCredit                 0.25           435.0              7.0              2.0

     The survey will be updated Sept 11.

--MNI London Bureau; +44 203-586-2226; email: jamie.satchithanantham@marketnews.com

[TOPICS: MTABLE,MABDT$,M$B$$$,M$E$$$]