–Nine Out Of 26 Still See MPC Boosting QE At May Meeting

LONDON (MNI) – Analysts are agreed that there will be no change to
the Bank of England’s asset purchase programme at this Thursday’s
Monetary Policy Committee meeting.

A MNI/NTKN survey found none of the 26 economics teams covered
expected any policy change from the MPC this month. Whether the BOE will
agree an extension to QE at the May meeting is a somewhat more open
question, with nine out of the 26 forecasting some addition to the
programme, ranging between +stg25bn and +stg50bn.

The May meeting will have available the results of the BOE MPC’s
next quarterly forecasting round to hand and therefore tends to be seen
as a better time for an in-depth discussion of the economic outlook.

The divide over the May meeting seems to have diminished slightly
since MNI’s survey ahead of the March meeting of the committee.

News and data flow in recent weeks have tended to confirm that a
moderate recovery is underway, although the overall picture is still
fairly foggy, with Q4 GDP being revised down to -0.3% q/q from an
initial -0.2% estimate and recent retail sales data underlining the
weakness of consumer demand.

The high-frequency business surveys have painted a livelier view of
the economy in Q1, with orders and output returning to levels seen
before the intensification of the euro zone funding crisis in the late
summer of 2011.

The split at the March meeting of the MPC, with Adam Posen and
David Miles backing a further stg25bn addition to QE, may also have
reinforced the opinion of those forecasting a further increase in May.

Please see the accompanying report for analysts’ views.

The table below shows analysts’ forecasts:

BOE BOE
QE QE
April May
Meeting Meeting
Total Total
Stg bln Stg bln
————————————————————————
Previous 325 n.a.

Median 325 325

High 325 375
Low 325 325
————————————————————————
Number Responses 26 26
————————————————————————
4Cast 325 325
Allied Irish Bank 325 325
Barclays Capital 325 325
BNP Paribas 325 325
BoA-ML 325 325
Capital Economics 325 350
Citi 325 375
Commerzbank 325 325
Credit Suisse 325 325
Daiwa 325 325
Deutsche 325 325
Global Insight 325 325
Goldman 325 375
Henderson New Star 325 325
Investec 325 375
Jeffries 325 350
JP Morgan 325 325
Lloyds 325 325
Morgan Stanley 325 350
NAB 325 350
Nomura 325 350
Novus Capital 325 325
RBC 325 325
RBS 325 325
Soc. Generale 325 350
UBS 325 325

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–London bureau: +4420 7862 7492; email: dthomas@marketnews.com;
Sanjukta Moorthy is a reporter with NTKN; email:
sanjukta.moorthy@ntkn.com

[TOPICS: M$$BE$,MTABLE]