As was widely predicted, the Bank of England's latest monetary policy meeting was a complete non-event. The MPC left policy unchanged as expected, ensuring interest rates remain at 0.50% and the asset purchase target still sits at GBP200bn. Given the lack of any shift in policy no explanatory statement was issued, leaving markets to wait patiently for the more interesting and revealing minutes to be released on 23 February. Ahead of that release however, we will also get the latest edition of the BoE's Quarterly Inflation Report (due 16 Feb), a publication whose importance has been accentuated by not only its timing ahead of the BoE Minutes, but also because of the prevailing inflationary environment within the UK and how the BoE's experts are choosing to perceive it.   What is more, we will also be treated to the January figures for UK CPI on Tuesday - where markets are predicting that annualized inflation will hit an eye-watering 4.1%, up from last month's already painful 3.7%. We have long been forecasting that the inflation rise would start to accelerate ahead of the BoE, but our calls for a near-term hike in rates to combat this trend was dealt a severe blow by the recent -0.5% QoQ GDP release for Q4. Nevertheless, we are convinced that this deviation away from the steady recovery in UK growth was overly pessimistic and likely due to exaggeration in modelling the negative effects of the winter's cold snap. We fully expect a revision higher when the next reading comes out on 25 Feb, and indeed a strong start to growth in 2011 when the Q1 figures are eventually available. In fact, this prediction was given a boost yesterday as the National Institute of Economic and Social Research (NIESR) said the UK economy grew +0.6% in January, largely due to the recovery of output from the impact of adverse weather at the end of last year. Coming up today, UK PPI figures are due and the market is looking for softer input costs but gains in output prices of 0.3% MoM.   As a side note, the Egypt saga continues; despite yesterday's rumours about an imminent step-down, Egyptian President Mubarak has defiantly maintained he will stay in power until September (after the elections). As such we've seen a mild reduction in risk appetite with corresponding USD strength; however we feel the possibility of contagion is limited.