BOE interest rate decision today

Sterling is little changed against the euro and the dollar, at around 87.5p and $1.3550 respectively, ahead of the Bank of England’s (BOE) latest interest rate decision due at noon today. The single currency, meanwhile, is off yesterday’s lows against the dollar but still remains below the $1.19 level, so it may not be out of the woods just yet

Following disappointing first-quarter GDP growth in the UK, the market expects the BOE to keep interest rates unchanged at 0.5%, a notable turnaround from just a few short weeks ago when a 25bps increased as almost fully priced in.  What the market will now be more interested to find  out is whether the BOE still thinks  “gradual but limited” rate hikes will be necessary over the next few years

Italian bond yields are under pressure this morning, as it looks like the anti-establishment Five Star and the right-wing Lega party may be able to cobble together a new government for the country

Oil prices continue to move up after the US decision to withdraw from the Iran nuclear deal, with Brent now at almost $78 per barrel

CPI inflation data are due in the US today. They are expected to show the annual headline and core rates moving up to 2.5% and 2.2% respectively in April, the highest readings since early 2017.

Other data due include industrial production in the UK and jobless claims in the US