In spite of hawkish stance from Bank of England's (BOE), Monetary Policy Committee (MPC) members Citibank has lowered its forecast for rate hikes from the central bank.

Bank has cut UK GDP growth forecast for the year to 2.6% in 2015, down from 2.8%, in previous expectations and 2.5% in 2016, down from 3% in previous forecast. Bank sighted weakness in third quarter data and broad based weakness in emerging markets.

Bank expects rates to be lower for longer given somewhat weaker growth than previous and disinflationary pressure. Moreover further slowdown in China could severely affect commodity prices.

In light of the above development, CITI has lowered forecast for rate hikes 50 basis points in 2016 (two) to just 25 basis points (one).

Initially bank had envisaged one hike in H1 2016 and another in H2 but now forecasting one in last quarter.

Pound is currently trading at 1.56 against Dollar.