Today, the Bank of England cut its interest rate by 25 basis points to 4.25%, the lowest in over three years. There is little consensus on the MPC, however, with two of the nine members voting for a cut of 50 basis points and two members voting for no cut at all. Indeed, the data over the past few weeks is wide open for interpretation.

Services inflation and wage growth, while running below the Bank of England's forecasts remain elevated. GDP growth in Q1 is expected to be strong and as April's inflation data will show, inflationary pressures do remain in the UK economy.

That said, the MPC sees key judgments which are of a more forward-looking nature had a dovish flavour to them. The MPC expects that the near-term pick up in UK inflation will not lead to second round effects on wages. It also believes that there is slack opening up in the labor market, and that world export prices will be materially weaker owing to changes in U.S. trade policy.

There was brief discussion of the UK/U.S. trade deal. For us, the specific provisions, while important for individual sectors, have a comparatively limited impact on the macro-outlook. The UK is a small open economy and as such, trading relations between the world's three largest economic regions the U.S., EU and China have more of an impact on UK monetary policy than the tariff rates it faces itself.

So going forward for the rest of the year, we expect three more cuts from the MPC as forward-looking concerns dominate their thinking and slowing wage growth and services inflation means that the data will support it too.