Next Thursday 5 November the Inflation Report, policy statement and MPC minutes will be released together for the second time at noon, and Governor Mark Carney will speak at 12.45.
Investec also said there is a good chance a second member of the MPC will join Ian McCafferty in calling for a rate rise, with Kristin Forbes seen as the most likely person.
The ‘monetary policy summary’ which gives an overview of the main decisions and messages the MPC wishes to convey is the most imporatant thing for investors to focus on, Investec said.
“Markets are currently not pricing in the first UK rate rise until the turn of 2016/17,”said Investec’s Chris Hare. “This is more dovish than at the time of the August IR, where the first hike was priced in for Q2 of next year. It also sits in contrast with the views of economists, who in surveys are split roughly 50:50 between predicting a February and a May rate rise.”
“Taking everything together, our central view is that the MPC will partially offset the impact of looser monetary conditions with a slight growth downgrade, allowing its medium term inflation forecast to drift a touch above the 2% target,” Hare continued. “That would send a message that markets have become too dovish about the rates outlook and would vindicate the economists’ view that rates will begin to rise in the first half of next year.”
