BoE Watch: BoE to talk tough, but unlikely to deliver

We expect the Bank of England to leave rates unchanged at 3.75% on Thursday 30th April. But with the data over the last month likely to have raised concerns about the risk of second-round inflation effects, we expect the Monetary Policy Committee to talk tough. This suggests there is little chance of markets pricing out rate hikes next Thursday. But we think there is scope for market interest rate expectations to fall over time.

At 3pm on Thursday 30th April we will be hosting a 20-minute online Drop-In to discuss the outlook for Bank of England, ECB and Fed policy. (Register here.)