CIBC Research discusses the BoE policy trajectory going into its Feb-4th meeting.
"The February MPC meeting will see revised estimates which will reflect the impact of a third national lockdown. Although more parts of the UK economy remain open than in the first wave of restrictions, including manufacturing and construction, we expect the central bank’s previous assumption of a near 2.5% Q1 quarterly GDP gain to be replaced by a retreat of between 1.5-2.0%," CIBC notes.
"Ahead of the February MPC decision, the Bank appears minded to avoid negative rates, with the Governor citing “lots of issues” in this regard. With the Bank reluctant to go negative, expect pressure on the BoE to consider a 10bp micro cut in order to provide some stimulus ahead of a vaccine dependent recovery into H2. Expect the latter to encourage GBP/USD to return to levels not seen since early 2018," CIBC adds.