-Seven Out Of 35 Analysts Predict More QE at June MPC Meeting

LONDON (MNI), June 6 – Shockingly weak domestic manufacturing data
and a renewed bout of Eurozone jitters have led to some late forecast
changes by analysts ahead of the June Bank of England Monetary Policy
Committee meeting, with one-in-five now expecting further quantitative
easing this month.

Economists at Deutsche Bank and Morgan Stanley have both changed
their calls in recent days are now predicting a fresh Stg50 billion in
QE at the end of the MPC’s June 6 and 7 meeting, while analysts at JP
Morgan have brought their call for more QE forward to July from August.
The majority of economists still think the MPC will hold the policy line
at this week’s meeting, but this survey suggests the tide is turning.

While only one MPC member, David Miles, voted for more quantitative
easing at the May meeting the minutes of that meeting revealed that for
several members the decision was “finely balanced.”

“It’s going to be close,” says Vicky Redwood, chief UK economist at
Capital Economics, who is one of those expecting a further Stg50
billion, taking total QE to Stg375 billion.

As Redwood and other economists point out, some MPC members are
strong disinclined to support further QE, with Executive Director
Markets Paul Fisher saying it was only needed to avoid the threat of a
deep recession and Chief Economist Spencer Dale blaming weak growth in
part on structural problems.

Events, however, may be rapidly overtaking the MPC with the economy
looking shakier than the committee previously thought and with euro area
storm clouds gathering.

“The MPC isn’t moving towards it (further QE), it is going to have
to be pushed,” Philip Shaw, chief economist at Investec, says.

Shaw thinks the MPC will hold on until August before it is driven
to a further Stg50 billion of QE.

The following table shows analysts’ forecasts ahead of the June MPC
meeting.

Stock Stock Stock Stock Stock Stock Stock
QE QE QE QE QE QE QE
End End End End End End End
June July Aug Sep Oct Nov Dec
MPC MPC MPC MPC MPC MPC MPC
Meet Meet Meet Meet Meet Meet Meet
Stg Stg Stg Stg Stg Stg Stg
Bln Bln Bln Bln Bln Bln Bln
————————————————————————
Median 325 325 325 325 325 325 350
Mean 335 339 348 348 348 354 355
High 375 375 425 425 425 475 475
Low 325 325 325 325 325 325 325
————————————————————————
Number Responses 35 32 31 31 31 31 31
————————————————————————
4Cast 325 325 325 325 325 325 325
Allied Irish Bank 325 325 325 325 325 325 325
Barclays Capital 325 325 325 325 325 325 325
BNP Paribas 325 325 325 325 325 325 325
BoA-ML 325 375 375 375 375 375 375
Capital Economics 375 375 425 425 425 475 475
Citi 375 375 400 400 400 400 400
Commerzbank 325 325 325 325 325 325 350
Credit Suisse 325 325 325 325 325 325 325
Daiwa 325 375 375 375 375 425 425
Deutsche 375 n/a n/a n/a n/a n/a n/a
Goldman 375 375 375 375 375 375 375
Henderson New Star 325 325 325 325 325 325 325
HSBC 325 n/a n/a n/a n/a n/a n/a
IHS Global Insight 325 n/a n/a n/a n/a n/a n/a
ING 325 325 325 325 325 325 325
Investec 325 325 375 375 375 375 375
JP Morgan 325 375 n/a n/a n/a n/a n/a
Lloyds 375 375 375 375 375 375 375
Morgan Stanley 375 375 375 375 375 375 375
NAB 325 325 350 350 350 350 350
Nomura 325 325 325 325 325 325 325
Novus Capital 325 325 325 325 325 325 325
Oxford Economics 325 325 325 325 325 325 325
Rabobank 325 325 375 375 375 375 375
RBC 325 325 325 325 325 325 325
RBS 325 325 325 325 325 325 325
Schroders 325 325 375 375 375 400 400
Scotia 325 325 325 325 325 325 325
SEB 325 325 325 325 325 325 325
Societe Generale 325 325 325 325 325 375 375
Standard Chartered 325 325 350 350 350 350 350
Standard Life 325 325 325 325 325 325 325
UBS 325 325 375 375 375 375 375
Westpac 375 375 375 375 375 375 375
————————————————————————

For more information contact UK editorial on 44-20-7862 7491 or e-mail:
drobinson@marketnews.com; wwilkes@marketnews.com

[TOPICS: M$$BE$,MTABLE]