SEB Research notes that the BoE's forecast changes related to growth and inflation in today’s Inflation Report were small.
"The BoE still expects the economy to continue to grow around trend while inflation is expected to continue to rise this year and peak just below 3% by the end of 2017. The member voting to lift the Bank Rate is about to leave the BoE and although a few members could consider changing their stance we clearly need to see more positive signals on the prospects for growth for this to occur," SEB notes.
In that regard, SEB still believes the the BoE remains 'overly optimistic' on the outlook for growth and this is unlikely to happen and eventually the MPC-members should be persuaded by weaker macroeconomic data.
SEB maintains its view that the BoE will leave monetary policy unchanged both this year and next arguing that tighter monetary policy seems unlikely before the UK has left the EU in March 2019.
Source: SEB ResearchOriginal Article
