GBP: Scope for few fireworks from this week's BoE; election the main game in town for GBP - BofAML

Bank of America Merrill Lynch Global Research discusses its expectations for this week's BoE policy meeting. 

"We expect few fireworks from the Bank of England (BoE) at this week's meeting. The contours of the BoE's forecasts should remain unchanged; below target inflation in the first half of the forecast rising above target in 2022 and a strong pick-up in growth on falling uncertainty and fiscal stimulus. This would signal a bias to hike in the medium term but also a distinct lack of urgency. They can wait and see. The BoE rate decision is likely to prove a distraction for GBP as the focus remains on 12 Dec. In a recent report, we outlined the impact of GBP in various scenarios. Our base case provides the most material upside for GBP in the near term, so in the run-up to 12 Dec, opinion polls will be more important than monetary policy or data. Initial polling suggests an outcome consistent with our base case and GBP has consequently been well supported. But we are cognisant of complacency risk as in 2017 and flag that polling could easily shift and impact GBP," BofAML adds.