Jonathan Loynes
Jonathan Loynes
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.
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.
consumer expect interest prompt rate
We still expect that the consumer slowdown will prompt more interest rate cuts,
add bit cuts cycle economic events good key lower perfectly rates reasons regardless stages
Today's cuts add a bit of pressure, ... but they're not the key factor. We're at dramatically different stages of the economic cycle (from Europe), and there are perfectly good reasons for the MPC to lower rates aggressively regardless of events on the Continent.
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.
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.
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 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.
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.
conclude equally growth lift perceived preparing rates risks seen signal strong time upside
The ECB may feel that the time is right to conclude that the risks to growth are now more equally balanced. Without a corresponding softening of the perceived upside risk to inflation, this would be seen as a strong signal that it is preparing to lift rates further.
alongside economy-and-economics euro evident further gathering hike interest march markets momentum rates rise supports view virtual zone
Alongside the gathering momentum evident in the euro zone economy, the virtual confirmation of a hike in March supports our view that ECB interest rates will rise further than markets are anticipating.
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).
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.
balanced convinced economic period start stronger wholly
We are not wholly convinced that this is the start of a period of stronger and more healthily balanced economic growth, however.