The Bank of England's Quarterly Inflation Report will be released tomorrow, followed by comments Governor Carney. He is expected to signal that despite the 7.0% unemployment threshold being approached, the recovery needs to strengthen and there is sufficient spare capacity to allow this to happen without posing inflation risks. Interest rates can stay low for longer. The market has taken this view on board. The implied yield of the March 2015 short-sterling futures contract has fallen from 1.10% as recently as January 22 to 0.84 bp yesterday. It seems unreasonable to expect much more of a decline. There is a solid ... (full story)