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BoE Preview 03 Aug 17
The BoE interest rate decision is due at 1100 GMT but we will also have the UK inflation report and the MPC meeting minutes followed by the Governor Carney press conference at 1130 GMT. Looking at the GBP price action over the past few weeks it seems that the investors are gearing up for a bullish BoE. However, since Mark Carney’s hawkish surprise at Sintra, we’ve had a slightly softer inflation and GDP print and this may help the BoE in moderating market expectations. Also, there are chances of some downward revision in the growth projections given slightly softer data recently and hence this will make BoE job difficult even if they want to be hawkish. We expect the vote to come in at 6-2 with any change towards 5/3 seen as hawkish. The key focus will remain on guidance for a rate hike at the end of 2017 with any hint on consensus for a rate hike at the end of the year seen as hawkish.