The BoE's MPC will be the first to make the announcement ending their two days meeting, as the soft data continued to flow our way till yesterday pressuring market forces to diverse upon their expectations of today's decision. Median estimates are for steady rates to be seen to day at 5.00% after the 25 basis points cut was seen in April with the first three-way vote split in tow years which is the strongest allegation to support the steady expectations for today as two members voted to hold last meeting.

Key softness is starting to prevail in UK economy, as the manufacturing sector continued to soften, along within the broader measure the industrial sector, which accounts for less of 1/5 of the GDP, nevertheless the most crucial element that pressured the pound south against majors was the sudden slowing in the services sector as it barely expanded in April and is what accounts for 3/4 of the economy.

The housing sector is stagnating as in April three of the major indices on house prices started to reflect annual declines most of which is taken into consideration for the BoE is Nationwide's index which saw the first annual decline since 1996. The financial sector's illiquidity has pressured further the housing downturn as mortgages available were withdrawn from the market and conditions are tight for approval, as we saw already official BoE data show mortgage approvals a key gauge into the sector's performance continue to pause new records low.

Still headline pressures are running high and as King expects now they are to prolong their consolidation above 3.0% this year which is making the balancing act much harder; sure we see softness in economic data yet the BoE has taken upon them to adopt new measures to ease tight liquidity with the new swap plan with ailing securities and as well raising reserve requirements so that banks benefit the bank's paid interest.

Oil neared $124 a barrel while wheat, corn and rice are still on the rise which is added pressure on inflation and its more of a problem for the hawkish ECB that the BoE. The European Central Bank is expected to leave key rates steady yet their surprise is to be upon the adopted rhetoric Trichet will convey in the press conference after the release.

Inflation ran at 3.6% yet the flash estimate has started to reflect slight easing, while so did Germany's CPI, which is a key element to assess noting their fast deterioration to disposable income as clearly numbers reflected how the 15-nations residents are trimming back on spending as they cope with high prices and as well energy and food prices that are tightening further their budget from retaining their standards of living.

The ECB is the strongest to withhold the American blow and the worst financial crisis since the Great Depression, now markets are questioning till when as they see softness emerge. The euro area's interest now is half of that in the US after seven consecutive cuts; the euro certainly lost its competitive edge as the euro appreciated strongly against majors and especially the dollar climbing above $1.60 mark.

They need to stimulate growth once more and they are in no place to do so as inflation is running high, and if it slows rapidly now and noting that inputs contributing to the rise from energy and food have not subdued means spare capacity did which is translated into softer growth as well. They surely can't use fiscal reform and lower taxes yet their budget deficit has narrowed to 0.6% of the GDP still that fuels pipeline pressure.

Trichet is expected to tone down the hawkish stance today after being nearly neutral, he will still say that they are to act in a firm and timely manner thought he will signal growth fears in a more profound rhetoric this conference. The BoE are highly likely to bring surprise for markets which they are prepared for as the cut in more priced in the market rather than steady rates though still dot let your guard down today for every minute counts until all is upon our hands to devour