The Week Ahead- Rate Decisions. TFMN

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The Week Ahead- Rate Decisions
(information taken from the FT website)
Bank of England, ECB decisions

The Bank of England’s Monetary Policy Committee and the European Central Bank’s governing council will set policy for the coming month on Thursday.

The Bank is expected to announce further quantitative easing after finishing the £75bn-worth of purchases announced in October.

Analysts are wavering, however, on whether the Bank will opt for £50bn or £75bn in additional asset purchases.

This from Chris Giles, the FT's economics editor:

After positive surveys on activity in manufacturing and services, economists are plumping for £50bn, with some even suggesting the Bank might hold fire, waiting to see whether the economy is now recovering strongly.

Most believe the MPC will still opt to extend QE because the positive mood has only arrived very recently and remains fragile. PMI indicators were also strong at the start of 2011 before falling rapidly.


Will the ECB break the 1 per cent lower bound for the first time? This from Ralph Atkins, the FT’s Frankfurt bureau chief:

The ECB is expected to hold its main interest rate unchanged at the record low of 1 per cent on Thursday. Mario Draghi, president, has cut borrowing costs twice since taking office on November 1. But the ECB governing council will probably want to await the results of a second offer of unlimited three year loans later this month before deciding on its next move. Purchasing managers' indices have supported Mr Draghi's view that eurozone economic activity is stabilising, although the weakness of the banking system still threatens a credit crunch. Thursday's meeting is also likely to discuss a planned broadening of collateral that banks can use to obtain ECB liquidity.


RBA vote

Earlier in the week, the Reserve Bank of Australia will decide whether to lower rates again. The RBA board’s decision is out at 14.30 Sydney time (05.30 GMT) on Tuesday.

The board’s statement comes on Friday at 11.30 local time.



Central Bank of Iceland/National Bank of Poland

On Wednesday, the Central Bank of Iceland sets rates for the coming month. It also releases its first monetary bulletin for the year. The National Bank of Poland’s Monetary Policy Council votes on the same day.


SNB’s Jordan

Thomas Jordan, the interim chairman of the Swiss National Bank’s governing council, talks on Tuesday at 11.45 local time (10.45 GMT).


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