Bank of America Merrill expects no meaningful impact on GBP after super Tuesday

"If the Bank of England (BoE) set interest rates on today's growth and inflation they would likely hike rates on Thursday. But rate setters look forward to set policy. Given the weak sterling they are still balancing a likely inflation overshoot against likely growth weakness. So we expect a neutral bias on policy from the BoE, and expect them to hold rates and not extend QE this week. We think the risks are skewed to a hawkish message. Carney will likely emphasize that there are limits to the BoE's inflation tolerance and conclude with a simple data watching position: steady as she goes for six months, but if growth does not slow then rate hikes will become more likely. Expectations going into next week's BoE meeting seem to have become increasingly polarized. While few on the Street seem to be forecasting an extension of QE at Thursday's meeting, market pricing in rates and our own sentiment surveys suggest investors remain split on QE. Consequently, we expect a hawkish reaction from the market to our central scenario of an end to QE and a relatively neutral BoE...Our economists' baseline scenario is unlikely to have a meaningful impact on GBP as this is pretty much the consensus view for the meeting".