Mcneill said: “The conclusion is that the bank is in no hurry to change policy. If the economy evolves as they expect there may be a case for a rise in bank rate in 2018.
“In our view there is more medium-term downside risks to the outlook than the bank suggests. For this reason, there would seem to be a slightly higher probability in the medium-term that the next move from the bank will be an easing rather than a tightening of policy.”
The Bank’s estimate for GDP in 2017 was revised down from 2% to 1.9%, according to its Inflation Report, and the bank confirmed CPI is expected to peak at 2.8% by the end of this year.
Dean Turner, economist at UBS Wealth Management, said the bank appeared “optimistic” on the prospects for the economy.
He said: “The Bank expects the squeeze on consumers will be offset in part with a better performance by exporters and investment. In our view, the this seems a little optimistic; we expect growth will slow more meaningfully as firms reassess their investment plans while Brexit talks are taking place.
“Sterling’s immediate drop looks justified. There is little in this report to suggest that the committee will become more hawkish in the short term, notwithstanding their marginally more upbeat language.”
