Market Participants Survey results – February 2022

1a) What is your central expectation for Bank Rate after the following MPC meetings (%)? Bank Rate is currently at 0.25%.

1b) With reference to your answers to 1a, how would you describe the balance of risks surrounding your expectations for Bank Rate?

1c) With reference to your answers to 1a, how would you describe your degree of conviction? 1 = lowest degree of conviction; 5 = highest degree of conviction

1d) What is your expectation for the peak level for Bank Rate in this cycle (%)?

2a) What is your central expectation for the actual stock of gilts held by the Bank’s Asset Purchase Facility (APF) after the following MPC meetings (£ billions)? The current stock of gilts is £875 billion.

2b) In the August 2021 Monetary Policy Report, it was stated that ‘The Committee’s preference is to use Bank Rate as its active instrument in most circumstances’. It was also stated that ‘the MPC intends to begin to reduce the stock of purchased assets when Bank Rate has reached 0.5%, if appropriate given the economic circumstances, by ceasing reinvestments of maturing UK government bonds’. Reflecting on this guidance and noting your answers in Question 1, after which MPC meeting would you first expect APF gilt reinvestments to be ceased? ^(a)

2c) In the August 2021 Monetary Policy Report, it was also stated that ‘The MPC will consider actively selling some of the stock of purchased assets only once Bank Rate has risen to at least 1% …and depending on economic circumstances at the time’. Reflecting on this guidance and noting your answers in Question 1, after which MPC meeting would you first expect active sales of APF gilts? ^(a)

2d) Reflecting on your answer to the above, what would be your central expectation for the total cumulative value of gilts (£ billions) that the MPC may have actively sold after each of the following time intervals? Please exclude gilts not reinvested from your forecasts.

2e) What is your central expectation for the actual stock of corporate bonds held by the APF after the following MPC meetings (£ billions)? As of close of business 12 January 2022, the outstanding stock of corporate bonds was £19.8 billion, with the MPC targeting a return to £20 billion as part of the current Corporate Bond Purchase Scheme reinvestment round.

3a) What is your central expectation for the 10-year gilt yield at the following points in the future (%)? Current 10-year gilt yield is 1.26% at 5pm on 19 January 2022.

3b) What is your central expectation for GBPUSD at the following points in the future? The level of GBPUSD as of 5pm on 19 January 2022 was 1.3625.

3c) What is your central expectation for EURGBP at the following points in the future? The level of EURGBP as of 5pm on 19 January 2022 was 0.8327.

4a) Please provide your central expectations for annual CPI inflation after each of the following time intervals. For reference, the most recent CPI print, for December, was 5.4%.

4b) In the Minutes of the December 2021 meeting, the MPC observed that medium-term UK inflation compensation measures in financial markets had remained above their average levels of the past decade. Please weight the following factors in order of importance in affecting the current level of medium-term UK inflation compensation measures (responses should sum to a total weight of 100% across the four factors). ^(a)