Amidst an unexpected dip in the UK inflation and retail volumes for September, markets are scaling back their expectations on a November Bank of England (BOE) rate hike.

The UK consumer spending, represented Retail Sales, fell for a fifth straight month. However, the Kingdom’s Markit business PMIs surprised to the upside in September.

Discouraging UK’s economic performance spurs a dovish shift in BOE rate expectations.

According to the CME BOEWATCH tool, the probability of a BOE rate hike at the November 4 meeting stands at 63% on Friday vs. 80% seen a day before.

Markets were pricing in a 31% chance of a BOE rate before Governor Andrew Bailey came out hawkish last Sunday.

Reuters Refinitiv estimate based on I/R futures cites a 90% chance of 15 bps hike next month.

more to come ...