MNI BOE Survey: Analysts See More QE Nov; No Cut In Bank Rate

-MNI Survey: Two out of 36 Economists Expect More QE In Aug
-MNI Survey: Seven out of 30 Economists Expect Bank Rate Cut By Nov
-MNI Survey: 17 out of 32 Economist Expect More QE By Nov

LONDON (MNI), Aug 1 – Economists expect the Bank of England’s
Monetary Policy Committee to leave policy on hold until November when it
will extend quantitative easing but the majority of them still do not
expect a cut in Bank Rate.

In an MNI survey, left open until midday Wednesday, only two out of
36 economics teams surveyed predicted any QE increase at the end of the
MPC’s Aug 1 and 2 meeting, while 17 out of 32 expect more QE at the end
of the November meeting.

The late changes of view among economists have all been from no
change to more easing, with economists from Barclays, Morgan Stanley and
Scotia all switching in the past 24 hours.

Barclays and Morgan Stanley economists are now predicting a fresh
Stg50 billion of QE in November with Bank Rate cut at that meeting from
its current 0.5% to 0.25%. Economists at Scotia are forecasting an extra
Stg25 billion at the August meeting.

Where economists are still out of synch with money market pricing
is on the likelihood of a cut in Bank Rate.

ICAP’s Sterling Overnight Index Average (SONIA) is pricing in a 25
basis point cut in Bank Rate at the November MPC meeting, putting around
an 85% chance on it on a basic calculation. The MNI survey, however,
finds that even with the late changes of heart, only seven out of 30
analysts are forecasting a 25bps cut this year.

The economists note that although the MPC again discussed the case
for a Bank Rate cut at its July meeting, there has been persistent
skepticism about its merits and their majority view is the central bank
will continue to leave it at 0.5%, the level it has been at since March
2009.

A fuller report on analysts’ views will appear in a separate piece
with the table of their forecasts below.

Aug Aug Sep Sep Oct Oct Nov Nov
Total Level Total Level Total Level Total Level
Date QE Bank QE Bank QE Bank QE Bank
of Stg Rate Stg Rate Stg Rate Stg Rate
F’cast Bln % Bln % Bln % Bln %
————————————————————————
Median 375 0.5 375 0.5 375 0.5 400 0.5
Mean 376 0.5 377 0.5 377 0.5 401 0.44
High 425 0.5 425 0.5 425 0.5 450 0.5
Low 375 0.5 375 0.5 375 0.5 375 0.25
————————————————————————
Number Responses 36 30 34 30 33 30 32 30
————————————————————————
4Cast 25-Jul 375 n/a 375 n/a 375 n/a 375 n/a
ABN Amro 27-Jul 375 0.5 n/a 0.5 n/a 0.5 n/a 0.5
Barclays Capital 31-Jul 375 0.5 375 0.5 375 0.5 425 0.25
Berenberg 29-Jun 375 n/a 375 n/a 375 n/a 375 n/a
BNP Paribas 31-Jul 375 0.5 375 0.5 375 0.5 425 0.25
BoA-ML 27-Jul 375 0.5 375 0.5 n/a 0.5 n/a 0.5
Capital Economics 25-Jul 375 0.5 375 0.5 375 0.5 425 0.25
Cebr 25-Jul 425 0.5 425 0.5 425 0.5 425 0.5
Citi 25-Jul 375 0.5 375 0.5 375 0.5 n/a 0.5
Commerzbank 31-Jul 375 0.5 n/a 0.5 n/a 0.5 n/a 0.5
Daiwa 25-Jul 375 0.5 375 0.5 375 0.5 425 0.5
Deutsche 30-Jul 375 0.5 375 0.5 375 0.5 375 0.5
HSBC 27-Jul 375 0.5 375 0.5 375 0.5 375 0.5
IHS Global 27-Jul 375 0.5 375 0.5 375 0.5 400 0.5
ING 31-Jul 375 0.5 375 0.5 375 0.5 450 0.5
Investec 30-Jul 375 0.5 375 0.5 375 0.5 425 0.5
Jeffries 25-Jul 375 n/a 375 n/a 375 n/a 375 n/a
JP Morgan 25-Jul 375 n/a 375 n/a 375 n/a 425 n/a
LBBW 27-Jul 375 n/a 375 n/a 375 n/a 375 n/a
Lloyds 31-Jul 375 0.5 375 0.5 375 0.5 425 0.5
Monument 31-Jul 375 0.5 375 0.5 375 0.5 375 0.5
Morgan Stanley 31-Jul 375 0.5 375 0.5 375 0.5 425 0.25
Natixis 29-Jun 375 n/a 375 n/a 375 n/a 375 n/a
NAB 31-Jul 375 0.5 375 0.5 375 0.5 425 0.25
Nomura 31-Jul 375 0.5 375 0.5 375 0.5 400 0.5
Oxford Economics 31-Jul 375 0.5 375 0.5 375 0.5 400 0.5
Rabobank 31-Jul 375 0.5 375 0.5 375 0.5 375 0.5
RBC 31-Jul 375 0.5 375 0.5 375 0.5 425 0.5
RBS 30-Jul 375 0.5 375 0.5 375 0.5 375 0.5
Scotia 31-Jul 400 0.5 400 0.5 400 0.5 450 0.5
SEB 30-Jul 375 0.5 375 0.5 375 0.5 375 0.5
Soc. Generale 27-Jul 375 0.5 375 0.5 375 0.5 425 0.25
Standard Ch. 31-Jul 375 0.5 375 0.5 375 0.5 375 0.5
Standard Life 31-Jul 375 0.5 375 0.5 375 0.5 375 0.5
UBS 31-Jul 375 0.5 375 0.5 375 0.5 375 0.25
Westpac 31-Jul 375 0.5 375 0.5 375 0.5 375 0.5

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For further information contact Sanjukta Moorthy, at Need To Know
News, on Tel: +44 207 862 7485 or David Robinson on 4420 7862 7491
e-mail: drobinson@marketnews.com.

[TOPICS: MABDT$,M$$BE$,MTABLE]