LONDON The Bank of England probably disagrees with investors who think it will keep interest rates at a record low for almost another two years, but it's unlikely to say so very loudly on Thursday.
As it publishes new economic forecasts with concern growing about a new global slowdown and an unsettling referendum on Britain's place in the European Union approaching, the BoE is likely to stress that it is in wait-and-see mode.
Analysts expect the BoE will give weaker inflation and growth projections for 2016 than its previous forecasts made in November, since when a lot has changed in the global economy.
Although the U.S. Federal Reserve raised borrowing costs in December, the Bank of Japan cut rates into negative territory last week and the European Central Bank might go further down that route soon.
There have also been signs that Britain's economic recovery may be losing some steam and BoE Governor Mark Carney last month rowed away from comments, first made last summer, that a decision on the timing of a first rate rise since before the financial crisis might come about now.
British GDP grew by 2.2 percent in 2015, according to preliminary data published last week, much slower than the BoE's November forecast of 2.7 percent. Annual wage growth of about 2 percent is well below the kind of levels the Bank has predicted.
A Reuters poll of economists last month saw the economy expanding by 2.3 percent this year, below the Bank's most recent projections of 2.5 percent. Another poll predicted a first rate hike in the last quarter of 2016.
Financial markets were even recently pricing in a slim chance of a cut in borrowing costs this year.
As well lowering its forecasts for economic growth and wage increases for this year, the BoE is expected to say on Thursday that near-zero inflation will edge up even more slowly in 2016 than previously expected, due to the latest fall in oil prices.
In November, the BoE saw consumer price inflation remaining below 1 percent until the second half of 2016.
On its own, a gloomier economic outlook for 2016 from Britain's central bank could harden the view among investors that a first rate hike is off the agenda until late next year.
But the Bank could temper that view by raising its forecasts for inflation in 2017 and 2018 to reflect sterling's sharp fall, which will push up import prices, a likely boost to growth from cheap oil, and an economy running at close to full employment.
Furthermore, the BoE will base its economic projections on the now-distant assumptions in financial markets for when interest rates are likely to rise, another reason why it might raise its inflation and growth forecasts for 2017 and 2018.
"The Monetary Policy Committee is on a slightly sticky wicket with respect to communicating its views," Philip Shaw, an economist with Investec, said.
The BoE is probably less worried about the global economy than financial markets, but sending a message of confidence too loudly could reverse the recent fall in sterling which is likely to help Britain's economy, he said.
Carney said last week he expected solid growth among the world's rich economies even if emerging nations were slowing, and a survey on Monday showed Britain's manufacturers had a better-than-expected start to the year.
Allan Monks, a JP Morgan economist, said the BoE would aim to send a "subtle message" on Thursday that investors are betting too far ahead on the timing of a first rate hike, which could come in late 2016 or possibly early 2017.
(Editing by Catherine Evans)