Howard Archer
Howard Archer
activity approval data february hints housing lending lose market momentum months mortgage relatively several starting
While the February mortgage lending and approval data are relatively healthy, there are hints that housing market activity could be starting to lose momentum after several months of improvement.
drag expansion fourth growth major modest overall quarter sector
The sector may see modest expansion in the first quarter of 2006, having been a major drag on overall growth in the fourth quarter.
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The strength of the public finances in January effectively guarantees that Brown will be able to avoid making any major tax hikes or significant spending cutbacks in March's budget.
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The slowdown in euro zone growth will not deter the ECB from raising interest rates in March and a further hike remains very likely in June.
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Euro region labor markets are finally beginning to see genuine, if somewhat limited, improvement, boosted by the pickup in growth since mid-2005. Rising employment is key to boosting consumer spending across the euro region.
export february flat orders
Flat export orders in February are particularly disappointing.
belief case consumer growth healthy interest november picking rate retail sales spending
Pretty healthy retail sales growth in November reinforces belief that consumer spending is picking up to some extent, and reduces the case for a near-term interest rate cut.
below data features headline positive
Below the headline data there are some positive features that should not be overlooked.
committee hold impression interest months rates reinforce remain select several treasury
The testimonies to the Treasury Select Committee reinforce the impression that interest rates are set to remain on hold for several months to come.
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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.
consumer december following marked overall performance recent relatively seen spending strong stronger survey
While the CBI survey indicated a marked softening in consumer spending following the relatively strong December performance, it nevertheless indicated a significantly stronger performance than that seen overall in recent months.
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It currently seems a pretty safe bet that interest rates will not change for several more months to come, if at all this year.
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Manufacturers will be hoping that healthier growth in the euro zone and a recently softer pound will increasingly feed through to give them with a significant boost in 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.