The Bank of England’s (BOE) Monetary Policy Committee (MPC) meets Thursday and is expected to keep interest rates unchanged, marking a sharp turnaround from early projections just a few weeks ago.A month ago, short-term interest rates had been pricing in another 25 basis point rate hike with near certainty (90 percent odds). But Governor Mark Carney lowered expectations after dovish comments he gave in an interview with the BBC, referring to data that was coming in on the “softer side.” He added that there “may be some differences of view at the May meeting, but that it is a view we take … conscious that there are other meetings over the course of the year.”Markets were quick to slash hiking odds in May to 50 percent. Only a week later, the first quarter GDP (gross domestic product) print came in at a tepid 0.1 percent quarter on quarter, below consensus of 0.4 percent and the BOE’s own forecast of 0.3 percent. Short-term interest rates are now pricing in less than a 10 percent probability of a hike this Thursday.
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