The “MPC-ometer” model followed here is marginally more dovish than in March but still suggests a majority hold decision this week.

The small dovish shift mainly reflects better survey news on inflation – price expectations of consumers and CBI manufacturers eased in the latest polls. The activity inputs to the model are little changed from last month while financial market indicators remain strong, arguing for policy inaction.

The model excludes any money supply or credit quantity measure, based on their lack of influence on MPC decisions historically. The continued weakness of bank lending in February could conceivably cause some members who were previously unconvinced to vote for additional QE this month on the grounds that the impact of the Funding for Lending Scheme is proving disappointing. Such concerns, however, may be allayed by the credit conditions survey released today, showing a continued improvement in loan availability and pricing along with a pick-up in expected demand – see chart. (The view here is that the “creditist” focus of policy-makers and the media is misplaced and that recent stronger money supply expansion argues strongly against any further liquidity injection.)