Forex Flash: BoE might increase QE on disappointing UK Services PMI – TD Securities

TD Securities believe today's services PMI results will be key for Thursday’s BoE decision on whether to extend QE: “After the weakness in both the manufacturing and construction PMIs already this month, we think that if the services PMI comes in below our forecast of 50.5 (market 51.0) then the BoE will increase QE by at least £25bn at this week’s meeting (in addition to the £6.6bn reinvestment from the APF’s March 2013 redemption), as the economy would no longer be showing the “muted pace of expansion” that it had assumed, and the Feb MPC vote was already close with 3 of 9 members (including Gov King) voting for QE”, wrote analyst Alvin Pontoh. Steady figures should give the BoE more time to reconsider.