The Bank of England is all but certain to leave interest rates at 0.5 percent and not to undertake any further quantitative easing purchases when it concludes its Monetary Policy Committee meeting on Monday. Growth data released over the past month has been a touch weaker than expected, while upward pressures on both consumer price and producer price inflation have been stronger than private-sector economists forecast.
Thus there is no overwhelming case for the Bank to make an unannounced change to interest rates -- which have been at a record low for over a year -- or to the 200 billion pounds of quantitative easing purchases which were completed in January.
Moreover, the lack of a clear outcome to Britain's national election on Thursday is a further reason for the Bank to avoid unexpected policy action.
None of the 63 economists polled by Reuters expected a change in policy.
Markets are jittery and the pace of future fiscal tightening to reduce Britain's record budget deficit is uncertain as the Conservatives did not win enough seats to implement their faster tightening plan without reaching a compromise with smaller, less hawkish parties.
Economists believe it is unlikely that the Bank will publish a statement to accompany its decision, as these are rare if the Bank does not change policy. Moreover, Governor Mervyn King will be able to communicate in much more detail when he holds his quarterly Inflation Report news conference on Wednesday.
"It's going to be pretty boring," said George Buckley, economist at Deutsche Bank. "On balance I don't think they will issue a statement. They will be talking about issues in much more depth less than two days later."
Nonetheless, there is scope for the Bank to issue a statement if markets fall off a cliff on Monday due to anxiety about how long it will take politicians to form a government.
The Bank forecast in February that consumer price inflation would fall below its 2 percent target late this year, but recent data has shown a surprisingly strong uptick in CPI to 3.4 percent and producer price inflation is at an 18-month high.
But first-quarter GDP came in weaker-than-expected at 0.2 percent after 0.4 percent growth in the fourth quarter, leaving ample spare capacity to bear down on domestically generated inflation, even if rising oil and commodities prices and sterling weakness are pushing up the cost of many imports. Following is a summary of possible scenarios for the Bank's decision, which will be announced at 12 p.m. on Monday.