Bank of England (BoE) Governor Mark Carney is expected to reiterate his commitment to low interest rates when he presents an update on his forward guidance policy on Wednesday.
The Bank is anticipated to use its quarterly Inflation Report to change its forward guidance on setting its benchmark rate, currently at a record low of 0.5%.
The BoE has come under mounting pressure to revamp its guidance as the unemployment rate falls faster-than-expected to the 7% threshold at which it said it will consider raising interest rates. The jobless rate dropped to 7.1% last month.
When the BoE said it would keep interest rates unchanged until the jobless declines to 7%, unemployment stood at 7.8% and the central bank didn't see it dropping to its target until 2016.
Some economists say the BoE may opt to set a timeframe for keeping interest rates low or reduce the jobless threshold to 6.5%.
"Convincing the market that you can hold rates lower for longer is going to be very difficult," Grant Lewis, an economist at Daiwa Capital Markets in London and a former Treasury official, told Bloomberg.
"Ultimately they have to keep giving the message that inflation is low, and try to convince people."
A day ahead of the inflation report, the Confederation of British industry today raised its 2014 growth forecast to 2.6% from a November prediction of 2.4%. It lowered its inflation forecast to 1.9% from 2.5% and predicted no interest-rate increase until the third quarter of next year.
UK inflation fell to 2% in December for the first time in four years, hitting the government-set target.
In company news earlier on Wednesday, Tullow Oil and African Barrick Gold will release their annual results, alongside Reckitt Benckiser.
Over on the continent investors will be watching the latest numbers out from the likes of Heineken, ING and Societe Generale.
Wednesday February 12th
Avanti Communications Group, Frontier Developments, Town Centre Securities
INTERIM EX-DIVIDEND DATE
Henderson Smaller Companies Inv Trust, Ideagen, Ingenious Entertainment VCT 1 'C' Shares, Ingenious Entertainment VCT 1 'D' Shares, Ingenious Entertainment VCT 1 E Shares, Ingenious Entertainment VCT 1 F Shares, Ingenious Entertainment VCT 1 G Shs, Ingenious Entertainment VCT 2 'C' Shares, Ingenious Entertainment VCT 2 'D' Shares, Ingenious Entertainment VCT 2 E Shares, Ingenious Entertainment VCT 2 F Shares, Ingenious Entertainment VCT 2 G Shs, Jupiter Primadona Growth Trust, Murgitroyd Group, Penna Consulting
QUARTERLY EX-DIVIDEND DATE
Boeing Co, BP, MedicX Fund Ltd., Picton Property Income Ltd, Royal Dutch Shell 'A', Royal Dutch Shell 'B'
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Crude Oil Inventories (US) (15:30)
Industrial Production (EU) (10:00)
MBA Mortgage Applications (US) (12:00)
Treasury Budget Statement (US) (19:00)
Norsk Hydro ASA, Smurfit Kappa Group
Northern 2 VCT
African Barrick Gold , Norsk Hydro ASA, Orange Polska S.A. GDR (Reg S), Reckitt Benckiser Group, Sampo OYJ, Smurfit Kappa Group, Telecity Group, Tullow Oil
OJSC Phosagro GDR (Regs)
F&C Capital & Income Inv Trust, Income & Growth VCT
UK ECONOMIC ANNOUNCEMENTS
BoE Inflation Report (09:30)
FINAL DIVIDEND PAYMENT DATE
Octopus VCT 3, Octopus VCT 4
FINAL EX-DIVIDEND DATE
Blackrock Income And Growth Investment Trust, Future, JPMorgan Russian Securities, Octopus Eclipse VCT 1, Pressure Technologies, Sage Group, Terra Capital