BoE announcement is due at 1200GMT on Thursday 20 December 2018

Quickie previews:

RBC:

  • Even before the deferral of the vote on the Withdrawal Agreement agreed between the UK and EU, there was very little market expectation that we would get any major announcements from the MPC at its last meeting of 2018.
  • Economically, at least, all the nuts and bolts are in place to adopt a more vigorous hiking path; the labour market is tight with pay growth firming, the latest Inflation Report forecasts show inflation above the Bank's 2% target across the policy horizon, the spending decisions from the Autumn Budget are likely to give a further boost to medium-term growth and inflation. The uncertainty of how Brexit will play out is keeping the MPC on hold, but with that uncertainly now set to drag on until mid-January, not only is the December meeting not 'live' but the ability of the Bank to actually do anything in February when the next iteration of the Inflation Report is due is also fading fast.

TD:

  • We expect the MPC to leave policy on hold
  • The policy backdrop has deteriorated somewhat since their November meeting--in particular with regards to activity data and political uncertainty--so the MPC might come out with a slightly more cautious tone.
  • Our base-case expectation for a slightly more-cautious BoE suggests sterling's capacity to rally meaningfully into year-end is limited. With Brexit related catalysts likely to wane until early-January, any marginal drivers that do emerge for the major GBP pairs are likely to rotate to the non-sterling leg.

UOB:

  • we expect it to sit on the sidelines for now as it waits for greater clarity given the wide and complicated range of Brexit outcomes
  • We penciled in a rate rise around mid-2019, but remain very mindful that rates could go in either direction next year.

UBS:

  • The Bank of England is expected to leave policy rates unchanged at its Dec meeting.
  • UBS expects the MPC to raise the Bank Rate twice next year and adopt a neutral stance from mid-2020.
  • Further hikes may not be a positive for GBP