Jonathan Loynes
Jonathan Loynes
british cut dent expect falling further growth inflation interest modest monetary prompt prospects rate rise sluggish year
While the stronger-than-expected rise in British GDP put a further dent in the prospects of an interest rate cut in February, we still expect the combination of sluggish growth and falling inflation this year to prompt a modest loosening of monetary policy.
below cut forecast growth hard inflation interest left work
It would have been better to have left the growth forecast unchanged, but that would have lowered the inflation forecast to below its target. They are having to work hard not to have to cut interest rates.
door inflation march open rate report retail sales soft thursday tomorrow
A dovish Inflation Report tomorrow and soft retail sales on Thursday could open the door to a March rate cut.
below fall falls further inflation interest output rates remain remains trend view year
We remain comfortable with our view that interest rates will fall further this year as output remains below trend and inflation falls back below its target.
below bills close core current effects electricity energy expect fading falls few further gas half headline inflation levels looking next push rate rising second target
Looking ahead, rising gas and electricity bills could keep inflation close to current levels for the next few months. But we expect further falls in core inflation and fading energy effects to push the headline rate well below target in the second half of the year.
committee cutting markets rates reluctance stopped surprise
Indeed, it may only have been a reluctance to surprise the markets that stopped the committee from cutting rates (last week).
although market quickly quite risen scope seems stock
It just seems to me that although the stock market has already risen quite strongly, if you look at how quickly the macroeconomic indicators have risen, there is still some scope for the market to rise even further.
average forecast growth hit looks mr percent quarters remaining three
To hit Mr Brown's forecast now, quarterly growth would have to average around 1.0 percent in the remaining three quarters which looks very unlikely.
acted early landing scenario soft
The MPC has acted early and aggressively. The soft landing scenario is still on track.
assumption average casting chances doubt grow household line monetary next policy rate spending three weak
A very weak report, casting doubt on the Monetary Policy Committee's assumption that household spending will grow in line with its long-term average over the next three years and boosting the chances of a rate cut.
figures finances public rather uk
August's UK public finances figures are, for once, rather better than expected.
clearly closer data decision hold interest markets members prompt rates rather recent seemed stronger surprised tone vote
The stronger tone of recent data was clearly enough to prompt most members of the MPC to vote to keep interest rates on hold today, but we would not be surprised if the decision was rather closer than the markets seemed to think.
changed control direction either hold interest likely month rates remain seventh since taking
Interest rates are very likely to remain on hold for a seventh consecutive month in March, it being the only month in which the MPC has never changed rates in either direction since taking control in 1997.
market
There are no very significant indicators that the market is getting too expensive.