We believe the Monetary Policy Committee will be forced to make two more cuts – in November and February.

Strip out higher oil prices, and Europe doesn't have an inflation problem. We're still bullish for the medium term.

With demand still weak, there's room to cut rates in the first half of next year. That'll keep yields around 4 percent for 10-year gilts.

This week's data is proof that the hawks in the Monetary Policy Committee are wrong, giving gilts support this week.

European government bonds are going to be the worst performing area in the first quarter. There'll be one more rate hike in the first quarter and another in the second quarter.

By stepping outside the majority view, he undermines his own credibility. He just becomes another member on the committee.