MUFG Research discusses its expectations for the BoE policy trajectory.
"The pound was subdued yesterday with sharp moves focused on the high-beta global-growth sensitive currencies like AUD, NZD, NOK and SEK. Those currencies all weakened by around 0.6-0.7% and the failure of the pound to weaken at all is most likely a reflection of the shifting ground at the BoE over monetary policy guidance. After Deputy Governor Ramsden hinted at a shift to a more hawkish stance, Michael Saunders followed yesterday and is certainly meaningful given his time on the MPC has shown his voting pattern to be a very good leading indicator for how the MPC eventually votes in majority," MUFG notes,
"A further cut in the QE purchase rate is most likely but we do not see the consensus being for a complete halt at this stage. COVID cases are surging and the impact on the economy could prove more considerable than expected,' MUFG adds.