All eyes on Threadneedle Street this week as the City waits (prays) for the Bank of England to fire up its magic money machine at the June gathering of the monetary policy committee.
Apart from the economic repercussions of the MPC’s deliberations, the two-day meeting gives it a shot at making history and becoming the first body to summon the fortitude to resist the charms of Christine Lagarde, beguiling head of the International Monetary Fund.
By Thursday we should know if her siren calls for the UK to make further interest rate cuts and create more electronic money have been fended off by the nine-strong committee, although the odds on that are shortening. Poor economic news on Friday (May’s PMI survey was a shocker) has been described by Deutsche Bank’s George Buckley as a “game changer”. Meanwhile, Citi’s Michael Saunders muses: “We continue to expect that worsening economic prospects will prompt the MPC to expand QE [quantitative easing] markedly further – to a total of about £500bn – and that the next instalment will occur soon. On balance, we forecast the MPC will expand QE by another £50bn at the June meeting.”
Surely the Bank’s nonet of middle-aged men wouldn’t consider frustrating the French temptress
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