Saxo’s John Hardy says he’s ‘backed himself into a corner’. It's clear that the first interest rate rise will be modest and lower than previous hikes.

The Bank of England governor also told British MPs there appears to be 'more spare capacity in the labour market than we previously thought'. The low unemployment rate is somewhat misleading, says Hardy, because many people are underemployed. He concludes that not everything is firing on all cylinders even though the UK economy is in recovery.

Although the pound has performed extremely well recently, Hardy says it’s now becoming increasingly difficult to position oneself as far as sterling is concerned. He adds that incoming data is what everyone – including central banks – are now relying on.