In Brief:

 

• Almost all analysts expect rates to be left unch but with outlier calls (MS, SG) for a 10bp cut

• Most expect a unanimous vote although see risk of 1 or 2 dissenters voting for a cut

• Market is pricing approx. zero chance of a cut this month and ~11bp by Feb 2022

• On QE, all analysts expect no change in the size of the programme

• Most expect the pace of QE to be left unch but a couple of exceptions look for a faster pace

• BoE should announce the findings on their review of negative rates. Most expect the BoE to

conclude negative rates can be used but may reiterate that they are unlikely at the moment

• New MPR forecasts could see GDP revised lower vs due to renewed lockdown

• Press conference is scheduled to be streamed via webcast starting at 13:00 GMT.

 

 

Barclays: Expect unch policy at this meeting. On neg rates, believe the MPC will report there are no significant hurdles in implementing them, preventing the front-end of the curve repricing higher. A dovish surprise at would include a member voting for a rate cut at this meeting. On the subject of the pace of QE, the MPC is likely to wait until the gilt remit before making changes

 

BoA: Expect unch policy at this meeting and a unanimous vote. Expect the BoE to open the door to neg rates but no actual rate change in 2021.

 

Citi: Expect unch policy at this meeting; key focus will be guidance for neg rates. The review should include some guidance on the Effective Lower Bound although a specific level is unlikely to be released. Expect the MPC to announce that neg rates are possible. Some guidance on the QE rate of purchases should be provided

– think the pace is left unch for now but may be slowed later in the year around May

 

GS: Expects rates unch but an increase purchased pace for QE. Expect the BoE will announce an easing for the Term Funding Scheme for SME’s (TFSME) although this will not include rate cuts. Expect the MPC to downplay the possibility of neg rates but not rule them out. The tone of the meeting is expected to be dovish. If a dissenter votes for a rate cut, markets will likely price an increased probability of neg rates for next meeting. GS feel a rate cut to neg levels is unlikely in the future.

 

ING: Expects no change in the policy rate and no clear signal on neg rates even if they confirm neg rates are feasible.

 

Investec: Expect the bias of the stance to remain towards easing but rates and QE size left unch. BoE could announce an increased purchase pace to £7bn/week from £4.4bn. Although the BoE will confirm that neg rates are feasible, see little chance of it being used.

 

Lloyds: Expect unch policy at this meeting or QE purchase pace. MPC will want to see the March Budget before making any changes to policy. Expect the BoE will confirm that neg rates are technically feasible but will likely announce that the financial system would need time to adjust to such a move.

 

MS: Expect a cut of 10bp to bring the Bank Rate down to 0.00%. Believe MPC will downgrade their economic outlook on the back of COVID lockdowns and Dec UK/EU trade deal; believes QE will be left unch and only reassessed at the March meeting;

 

NWM: Expect unch policy at this meeting. Expect the votes to be unanimous but see a 35% probability of one or even two dissenters voting for a rate cut assuming the BoE announces that neg rates are feasible. Expect the BoE to announce that neg rates are operationally viable but the MPC may push back slightly against their use in the present environment.

 

RBC: Expect unch policy at this meeting. Now expect QE to be the main tool to combat weakness in the future after recently removing their own call for a rate cut

 

SocGen: Expect a 10bp cut in Bank Rate to zero, accompanied by an expansion of the Term Funding Scheme (possibly following the tiering approach of the ECB TLTRO) to mitigate the impact of the cut on banking profitability.

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