Will BoE Surprise The Market Later?

I anticipate BOE to be hawkish. Consider to Short EUR/GBP. 

BOE raised rates for the first time in more than a decade in November and are preparing to release their latest policy decision later. Markets had started to price in further tightening in May even before the positive upturn in wage growth, while a second hike seemed probable later this year. 

There are 2 reasons why “hawkish bias” is expected:

• UK’s basic wage growth accelerated to 2.6 percent in the three months through January, as the employment rate returned to a record high and the jobless rate fell to 4.3 percent to match the lowest since 1975.Consumer prices rose 2.7 percent in February from a year earlier, down from 3 percent in January but still well above the 2 percent target. The string of strong data would reinforce BOE outlook for a rate hike
• Brexit negotiators reached a breakthrough this week on securing a transition deal once the UK quits the European Union next year. Last month, BOE identified the split as the most significant source of uncertainty over the outlook, with Governor Mark Carney previously urging the government to agree a hand-over deal the sooner the better.

Furthermore, it was reported that more than a million staff in England’s National Health Service may receive pay increases of more than 6 per cent over three years which will overall wage growth. The main focus for BOE will be the monetary policy statement and votes by committee favouring a rate hike versus keeping rate steady.