The UK soft data looks bad (Chart of the Day): the economy has taken a big hit and may be in contraction. Rate setters will have to cut their growth forecasts heavily in the 4 August Quarterly Inflation Report and highlight the downside risks, though we do not expect them to forecast recession (just). The BoE should throw the kitchen sink at the problem: the worst thing that could happen now is the stimulus does not work, so better to do too much. Dismal data since the BoE’s last policy meeting (which rate setters seemed not to expect) and MPC member Martin Weale’s dovish flip-flop suggest less risk of ... (full story)