Credit Agricole CIB Research discusses its expectations for the BoE policy meeting on Thursday.
"This week, focus will be on the BoE’s policy meeting and monetary policy report. We expect the MPC to downgrade its economic outlook in view of the latest lockdown measures and the lingering risks after Brexit. We continue to expect the BoE to cut rates in Q221 in contrast to the market consensus that has pared back its expectations of further easing until the end of this year," CACIB notes.
"Evidence that the market has front-loaded its rate cut expectations after the BoE meeting could weigh on the GBP in the near term. Moreover, more persistent risk sentiment could add to the headwinds for the GBP vs the EUR and the USD once again," CACIB adds.