Bank of England tomorrow

[Somewhatfoolish]

No one seems to have started this thread yet so I will. While my personal expectation is no move on rates and no move on QE, this is one of the first BOE meetings in a while where a move of either is plausible. Amazingly, according to survey one analyst is actually going for a 50 bps cut - i.e. to 0%, and some others are after 25 bps. More plausibly there may be an increase in QE, which is currently 325 bln. No one seems to be going for an incerase of more than 50bln, and it's only 2 out of 50 "experts" who are going for more QE this time around.

The markets are currently pricing in what I would call a very small chance of anything happening. For example front month short sterling is effectively going for a libor of 0.965 at exipry (compared to current libor of 0.991) and 1 month sonia is 0.469 compare to 0.4935 today.

I think that covers everything. Thoughts?

[anonymous-user]

In my opinion, IR will remain the same and there will be no more QE, they'll save that option in case things get even worse.

[Brite spark]

Inkyfingers said:

In my opinion, IR will remain the same and there will be no more QE, they'll save that option in case things get even worse.

Nearly put +1 but wondered if now would be a good time to bury some more QE as Spain and the Greek elections take centre stage

[anonymous-user]

Brite spark said:

Nearly put +1 but wondered if now would be a good time to bury some more QE as Spain and the Greek elections take centre stage

Personally i'd say no. More QE won't stop the problems in Greece and Spain, but Greece and Spain might soon cause more problems to us that could possibly be helped by QE.

[FamilyDub]

Inkyfingers said:

In my opinion, IR will remain the same and there will be no more QE, they'll save that option in case things get even worse.

This.

The Fed stated a couple of months ago, they wouldn't raise US IR until at least Q4 2014, so I imagine the MPC will hopefully do the same...

[12gauge]

No change in rates, £50bn QE. IMO

Kick the can a little further.

[Brite spark]

Inkyfingers said:

Brite spark said:

Nearly put +1 but wondered if now would be a good time to bury some more QE as Spain and the Greek elections take centre stage

Personally i'd say no. More QE won't stop the problems in Greece and Spain, but Greece and Spain might soon cause more problems to us that could possibly be helped by QE.

I wasnt thinking QE to help them, more use them to bury the effects of it in the money markets, ie

Thinking more QE announced for us now whilst there is still the distraction on Greece and Spain rather than after they hit the fan (even more so ) and Boe QE would be focused on more.

[AJS-]

anonymous said:

[redacted]

If only there being no point meant there was no chance of it happening.

[Digga]

anonymous said:

[redacted]

Broadly agree. There's also little point in them (comically belatedly) trying to set up new sources of SME finance - that ship sailled. TBH, the days of piss-easy credit - uncollateralised - are simply gone and only the (ill-advised) return of that would make much difference to the majority of under-capitalised firms.

I think the BoE needs to save a few fireworks for the main event across the channel.