The Bank of England is widely expected to maintain its base rate at 3.75% when policymakers convene on Thursday, following a convergence of cooling domestic inflation and a potential end to hostilities in Iran.
The decision comes just one week after the European Central Bank raised rates for the first time in nearly three years, highlighting a growing divergence in the monetary policy paths of the UK and the eurozone.
8% from 3.3% in March, dropping below the 3% consensus forecast.
Sterling and UK government bond yields have adjusted to reflect the high probability of a hold, as traders price out the risk of a hawkish surprise.
The market consensus has shifted decisively toward a prolonged pause, driven by the belief that the central bank no longer faces the dual pressure of entrenched domestic price growth and escalating energy costs from a Middle Eastern conflict.
April’s preliminary inflation data from the Office for National Statistics provided the domestic foundation for the dovish outlook.
The consumer price index fell to 2.8% from 3.3% in March, dropping below the 3% consensus forecast.