Pimco - Global Central Bank Focus: Foward Guidance Is Back at the Bank of England

- The Bank of England (BOE) seems keen to avoid any perception that the UK is at risk of persistently low inflation, or indeed deflation. That said, we see some downside risks to the BOE's inflation forecast.

- BOE rhetoric may also serve to place a greater risk premium in the UK bond market ahead of the U.S. Federal Reserve's anticipated rate hike.

- We believe the BOE wants markets to "keep the faith" that the UK's next rate move will be up, curtailing any genuine expectation of policy tightening anytime soon.