Market turmoil to reinforce MPC’s dovish stance

Last month’s MPC minutes and Inflation Report suggested that the Committee was in less of a hurry to raise rates than many had thought. And the recent market turmoil and commodity price falls are only likely to encourage the MPC to hold fire for a while yet. That said, markets probably went too far last month in pushing their expectations for a rate hike to the end of 2016. We still expect a rise in the second quarter ofnext year.