BoE preview: soft data could lead to a dovish surprise. Here's what to look for.

The Bank of England (BoE) is set to cut rates by 25 bps bringing the Bank Rate down from 4.00% to 3.75%. The anticipated vote split is 5-4, with Governor Bailey expected to align with the dovish faction. Traders are particularly focused on the vote split and any surprises in the forward guidance during the decision-making meeting which will not include a press conference. Last meeting’s split was 6-3 aiming to maintain rates, which shifted to a more dovish stance with unexpected comments from the members. The recent UK CPI report showed downtrend, reinforcing rate cut speculations. A 6-3 split favoring a rate cut could surprise the market negatively affecting the pound while supporting UK stocks. Conversely, a hold of rates could spur a rally in the pound but cause a sell-off in stock prices. The guidance from the BoE is expected to remain unchanged unless a significant alteration is noted, especially the removal of the term 'gradual' would signify an unexpected dovish stance.