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Lower inflation outlook to keep the MPC on hold for a while

The MPC’s decision to leave interest rates on hold at 0.5% today, for the 82nd month in a row, was unsurprising given the recent fall-back in the oil price and renewed market concerns about the health of the global economy. Indeed, these risks underline that rates are going nowhere fast. But we still think that markets have gone too far in expecting interest rates to remain on hold until Q2 2017.

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