They still think that inflation will remain near their 2 percent target and acknowledged that they were unsure about how energy prices will impact inflation.  However, after seeing yesterday’s weak inflation numbers, particularly the drop below the BoE’s target for annualized inflation, some traders had expected the BoE to be a bit dovish.  The more neutral report on the other hand makes the outlook for a rate cut in the near future murkier, which has given some sterling bears a reason to square positions.