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.
boost euro feed growth healthier hoping pound recently softer zone
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.
consumer energy evidence higher increasing inflation late pay price pushed recently starting
This confirms that late in 2005 there was still no evidence that pay was starting to be pushed up by recently higher consumer price inflation and increasing energy bills.
activity adds annual buyer cent climb degree evidence house housing increased inflation limited low market november october per price prices recent recently reported stronger
The climb in annual house price inflation to 2.5 per cent in November from a nine-year low of 1.8 per cent in October reported by the ODPM adds to the recent evidence that house prices have firmed to a limited degree recently amid stronger housing market activity and increased buyer interest.
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.
bank basis belief england eventually further growth interest optimistic outlook rates
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.
cut eventual increases interest move next odds prospects rates until
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.
below data features headline positive
Below the headline data there are some positive features that should not be overlooked.
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.