No action this month – but MPC may not be done

The Monetary Policy Committee (MPC) is unlikely to alter its quantitative easing (QE) programme at this meeting, given that it was only last month that it voted to extend the policy. Nonetheless, we see scope for the policy to be extended again later this year. Meanwhile, interest rate expectations have fallen back in recent weeks, but we still think that markets are over-estimating the speed with which policy will be tightened.