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Oil price plunge won’t distract MPC from underlying picture

With the recovery showing signs of frailty and the chances of deflation growing, the MPC is under little immediate pressure to raise interest rates. But since lower oil prices should put the spring back into the recovery’s step and underlying price pressures are stronger than the headline inflation rate suggests, we doubt that the MPC will wait until 2016, as markets now expect, to raise interest rates.

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