The Bank of England looks set to leave interest rates at a record low on Thursday and may give little away about the future of its asset purchase scheme ahead of new growth and inflation forecasts next week.
The central bank cut interest rates to 0.5 percent in March and indicated they were unlikely to go any lower. That shifts the focus to whether the BoE will announce fresh plans to boost the supply of credit in the economy.
"It looks highly probable that the Monetary Policy Committee will once again keep the overall stance of policy on hold and the target for asset purchases at 75 billion (pounds)," said Philip Shaw, economist at Investec.
The central bank is already two-thirds of the way through its initial programme to buy gilts and corporate bonds with newly-created money and it is likely to reach the 75 billion pound total by the end of this month.
It has the leeway to extend the scheme by a further 75 billion pounds if it sees fit. However, policymakers may be reluctant to take this decision so soon.
Instead, the MPC may want to take some time to assess the impact of the cash injections before spending any more, especially as money supply data for the first month of the programme suggested there had been little impact yet.
Also, recent surveys have indicated the worst of the downturn may be over, removing the urgency for any immediate further stimulus.
The BoE will have the chance to provide a deeper insight into its thinking when it publishes new quarterly forecasts next Wednesday.
But analysts warned the gilt market could react badly if the BoE doesn't give any update at all on its plans on Thursday.
Certainly, investors seem to be preparing for the worst, with June gilt futures ending Wednesday's session at their lowest level since early March, before the asset purchases started.
"A sell-off in the instance the BoE remains silent on the matter would undermine the effectiveness of the process," said Richard McGuire, strategist at RBC Capital Markets. "However, the firmness of the recent data tone does see the outcome of tomorrow's meeting a close call."
