James Smith, a Developed Markets economist at ING, notes that the Bank of England's (BoE) latest statement is a little more upbeat than might have been expected, but crucially offers no new clues on rate hike timing.

"The Bank of England's latest message is a cautiously upbeat one, though it's clear that policymakers are essentially in a holding pattern for the time being. The central bank is caught between higher-than-expected inflation and encouraging activity data, and mounting uncertainty surrounding Covid-19."

"The Bank has kept both rates and QE on hold this month, despite a vote to end the latter early from outgoing Chief Economist and arch-hawk Andy Haldane. But more importantly, the committee opted against offering any more concrete hints of future tightening."

"The lack of stronger hints about a rate hike timing is arguable because there’s no real need to guide markets at this stage."

"But assuming the near-term Covid-19 concerns fade towards the end of the summer, following widespread double vaccination, then the debate over rate hike timing is likely to gain more momentum. While the latest inflation reading was higher than expected, and the Bank now expects inflation to exceed 3% at some point this year, our view and theirs is that price pressures will subside through 2022. That, in turn, reduces the imminent pressure to ease stimulus, and we’re currently pencilling in the first move in early 2023."

"On the QE side, despite Andrew Haldane's vote, we very much doubt the Bank will curtail the programme early. The BoE remains on track to actively stop expanding its balance sheet at the end of the year – having tapered the pace of purchases last month. Unexpectedly, ending the scheme early would potentially set a precedent in the eyes of investors, and risks limiting the potency of future QE programmes."