Bank of England adopts more dovish tone

Bank of England adopts more dovish tone. In contrast to recent Fed pronouncements, the "Super Thursday" output from the MPC, in particular the November Inflation Report, struck a decidedly more dovish tone over the near term with downgrades to Bank staff projections for GDP growth and inflation over 2015 and 2016. 

To some extent this reflected softer-than-expected outturns for both during Q3. But the downside impacts of both a moderation in emerging market growth and the recent rise in sterling are also forecast to be stronger than previously thought. 

Nonetheless, the projected elimination of spare capacity over the next year and an inflation overshoot at the end of the two-year policy horizon suggest that the current market expectation that the first increase will not take place until early 2017 may be overdone. Now the first hike is expected in August 2016.