Howard Archer
Howard Archer
bank charlie chief cut december early england interest member odds rate recently voting
With one member of the MPC voting for an interest rate cut in December and Bank of England chief economist, Charlie Bean, recently making some dovish comments, the odds of an interest rate cut early in 2006 are rising.
believe cut delayed early increasing odds premature rule until
While we believe that it is premature to rule out another 25-basis-point cut before the end of this year, we acknowledge that the odds are increasing that it will be delayed until early 2006.
believe couple cut door early economy fails improvement interest next opening rate signs sustained
We believe the door is opening for an interest rate cut early in 2006 if the economy fails to show sustained significant signs of improvement over the next couple of months.
although bank consumer cut door early england interest keeps levels open prefer rate spending strength wage wait
This (CPI data) very much keeps the door open for an interest rate cut in February, although the Bank of England may still prefer to wait while it monitors the strength of consumer spending and wage settlement levels early in 2006.
bank basis believe clear contained cutting data early earnings encourage england evidence further future hold immediate interest likely march moderation pay points rates remaining seeks signs sustained wage
The earnings data may encourage the Bank of England to hold off from cutting interest rates in the immediate future as March while it seeks sustained clear evidence that the pay settlements for 2006 are remaining contained (the early signs are that wage moderation is continuing). However, we believe that interest rates are likely to be trimmed by a further 25 basis points by May.
borne case christmas consumer cut early emerging hard healthy interest picture rate reasonably seems spending underlying
The underlying picture that seems to be emerging is that consumer spending will be reasonably healthy over the Christmas period. If borne out by hard data, this dilutes the case for an interest rate cut early in the New Year.
belief consumer despite remain retail spending subdued time
This reinforces our belief that consumer spending will remain subdued for some time to come despite September's pick-up in retail sales.
below climb coming continue danger economic further growth individual likely mortgage near remain term trend
With economic growth likely to remain below trend in the near term at least and unemployment set to continue rising, there is a very real danger that individual insolvencies and mortgage repossessions will climb markedly further over the coming months.
bank below both clearly consumer cut december england forecast inflation interest january level levels looks november price rate suddenly target
With consumer price inflation below the 2% target level in both December and January and clearly below the levels forecast by the Bank of England in their November quarterly inflation report, a near-term interest rate cut suddenly looks a very real possibility again.
bank boost clearly consumer data england hopes inflation largely october premature prices reassuring sound
While it is clearly premature to sound the all-clear on inflation, the October consumer prices data are largely reassuring for the Bank of England and boost hopes that inflation has peaked,
believe coming debt earnings given house increased increases levels price relatively
We believe house price increases will be relatively muted over the coming months, given affordability constraints, increased debt levels and muted earnings growth.
cut door interest keeps open rate
This very much keeps the door open for an interest rate cut in February.
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This underpins our belief that the Bank of England is too optimistic on the growth outlook and will eventually end up trimming interest rates by a further 25 basis points.
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This significantly reduces the prospects of any interest cut until at least August. Indeed, it increases the odds that the eventual next move in interest rates could be up.