The main focus of the European session is now on the Bank of England (BOE) policy meeting which is expected to keep interest rates at 0.10% and the £ 895 billion bond -buying program unchanged.
Yet, at the same time, there are expectations of changes by analysts on the tightening of monetary policy following the progress made in vaccination campaigns and the economy is also showing improvement.
The BOE has made purchases of about £ 4.4 billion of government bonds each week which will see the program reach its overall target in early November.
Analysts predict BOE policymakers will announce to slow the buying rate so that the program can run until the end of the year instead of ending abruptly.
However, on the other hand there are also analysts who are not expecting change and will look at Governor Andrew Bailey’s press conference and minutes of the meeting to get a clue when the BOE might act.
Meanwhile, the market also expects the central bank to raise its UK economic outlook to over 7% this year, supported by the rapid Covid-19 vaccination program.
With more than half the population already vaccinated, and coupled with a strong recovery in the US as well as the reopening of sanctions in eurozone countries, the outlook for the UK economy is clearer and brighter than the prospects seen in February when the BOE’s last forecast was released.
