The November Inflation Report is notably more dovish than its August predecessor, mainly reflecting increased MPC concern about slowing emerging economies. The change in tone probably also reflects a desire to minimise upward pressure on sterling should the ECB ease policy further in December.

The change in the MPC’s collective opinion is summarised by the two-year-ahead mean inflation forecast based on unchanged policy, which has been cut from 2.6% in August to 2.3% in November, returning it to its level in May. The implication is that a rate rise is no more urgent now than it was in May.

The 2.6% August forecast chimed with Governor Carney’s July statement that a decision to raise rates would “come into sharper relief around the turn of this year”, i.e. five months later. The November cut in the forecast suggests that a rise is still at least five months away, i.e. next spring at the earliest.

The view here, based on monetary trends, is that global and domestic economic prospects are stronger than the MPC judges. If correct, incoming news should shift the Committee in a hawkish direction by the time of the February Inflation Report.

An additional significant announcement today was new “guidance” that the MPC expects to maintain the stock of asset purchases at £375 billion until Bank rate returns to around 2%. This increases the risk of an abrupt rise in rates since the alternative policy tightening option of early asset sales is no longer available.