The great tightening wave in Europe is coming any minute now.... Just not yet. Below is Goldman's take on today's unsurprising move by the BOE to keep rates unchanged (although judging by the GBP some actually were surprised).
Bank Rate unchanged at 0.5%; stock of asset purchases unchanged at £200bn; no statement.
We expect the first 25bp hike in May. Two things, in particular, wil be key in the run-up to the next Inflation Report, (i) whether a combination of revisions to Q4 GDP and the first release of Q1 GDP lifts the path of official output closer to that implied by business surveys, and (ii) the development of wage settelements in the private sector, the median of which rose sharply to almost 3% in January on IDS data.
The minutes to today's decision are due on 23 March.