UK [B]Gross Domestic Product[/B] is set to shrink -0.3% in the second quarter, a far smaller decline than the -2.4% lost in the three months through March and the smallest drop in a year. London-based think tank NIESR has forecast the moderation, saying “the U.K. economy is now stagnating rather than continuing to contract at a sharp pace.” Minutes from the last meeting of the Bank of England echoed the optimistic outlook, with policymakers saying risks to GDP have probably diminished and speculating that the economy may shrink less than was previously expected. Not everyone is as sanguine, however: the British Chamber of Commerce urged the BOE to add 25 billion pounds to their asset-buying scheme, saying a recovery is “not guaranteed”, a sentiment that has been echoed by the Shadow Monetary Policy Committee (a group of independent economists that meet at the London-based Institute of Economic Affairs). This makes today’s report critical to shaping the market’s expectations of future of monetary policy: traders will likely be less sensitive to a print in line with or better than what is expected, as this would only reinforce themes that have already been priced into the exchange rage; conversely, a disappointing outcome could weigh heavily on sterling as traders readjust their exposure to reflect a likely expansion of quantitative easing.