The committee will also publish new forecasts alongside its February decision.
Recent data weakness will likely prompt the MPC to downgrade GDP growth for 2025 to 1% (1.5% previously). The 40-bp upward shift in the yield curve since November is also likely to mean lower growth ahead – of 1.2% in 2026 (1.4% previously) and 1.1% in 2027 (1.2% previously).
Bloomberg think the MPC’s ‘supply stocktake’ — its annual review of the supply side of the economy — will confirm that it thinks the economy can grow by about 1-1.5% in the medium term without stoking excess inflation.
The committee is likely to see more spare capacity emerging over the next three years relative to November. That will probably mean inflation is seen at target in two years’ time before falling well below it three years’ ahead.
If Bloomberg are right, the key takeaway from the projections will be that the MPC expects to lower interest rates by more than 55 bps this year – the scale of easing embedded in the rate path underpinning the forecasts.