BoE’s Sentance expects a gradual U.K. recovery in the second half of 2009 when the main impact of the credit crunch has faded. In a fairly balanced speech late yesterday, Sentance said that the key question is whether further interest rate moves are needed giving the changing economy. He noted that financial turbulence is having a clear negative impact on businesses and consumer confidence and he expects the economy to start contracting in the second half of this year or in early 2009, with one or more quarters of negative growth. However, he sees the downturn to be milder than the economic slowdowns of the early 1980s and 1990s. He also stressed that it is important that monetary policy does not over-react to to developments on volatile markets. So overall, fairly balanced comments given recent events and suggests that Sentance will vote for a steady rate at next month’s meeting. During the last few hours, the pound-dollar (GBPUSD) strengthened to move above 1.8600.