Bank of England (BOE) governor Mark Carney's clear message to the City during his annual Mansion House speech on Tuesday was that talk of an imminent rise in U.K. interest rates was premature.
His position stands sharply at odds with that of departing BOE policymaker Kristin Forbes who has re-emphasized her ongoing concern both during her final BOE meeting last week and in subsequent comments to the press that the U.K.'s central bank is underestimating the pernicious effects of inflation on consumers.
Following the 5-3 vote in favor of holding interest rates at last week's BOE meeting, the market had finally began to digest the message that the central bank had tried to spell out within its May statement – that a rate hike could be sooner than traders seemed to be betting.
Yet, Tuesday's speech resoundingly brought market expectations back to the view that a rate hike was still sufficiently far off in the distance, Peter Chatwell, head of European rates strategy at Mizuho International, told CNBC via email on Tuesday.
"He has stated his concern about inflation being subdued - this being a reference to weak underlying inflation and wages - and is contradictory to the analysis presented by the outgoing hawk Kristen Forbes."