The Bank of England's (BOE) upcoming policy meeting could go a long way in providing some positive sentiment in the U.K. economy, long burdened by sluggish growth and Brexit drama, according to analysts.
Slightly sunnier forecasts for U.K. growth of late are leading analysts to believe the Bank will send a more hawkish signal from its monetary policy committee (MPC) on Thursday, indicating an interest rate hike in May.
The last quarter of 2017 saw a 0.5 percent expansion for the U.K. economy, up from an expected 0.4 percent, boosted by the services sector.
"A stronger growth outlook should encourage the BOE to speed up plans for gradual tightening, having signaled a glacial pace of one hike per year in the coming years," Lee Hardman, currency analyst at MUFG, said in a research note.
"Barring another negative Brexit shock, we suspect that U.K. growth forecasts are likely to be revised even higher during this year."