Ross Walker
Ross Walker
bank bit casts consumer doubt forecasts growth stronger weakness
This suggests more weakness and casts doubt on the sustainability of stronger consumer spending. The Bank of England's growth forecasts look a bit optimistic.
forecast global held means rate rates recovery remain stick surprised uk
The faltering global recovery means we would not be surprised to see a rate cut, but with the UK having held up well... we stick to our forecast for rates to remain on hold.
base bias current cut downside employment expect forecast industrial monetary point policy quarter recent recession translate trends wage
If the recent trends of muted wage inflation, deteriorating employment and industrial recession persist, we would expect the current downside monetary policy bias to translate into a cut in base rates. Our forecast is for one more quarter point reduction, in May.
best cut data economies group measure point post quarter risk september seven shape uk
Of the Group of Seven economies the UK is in the best shape but there is a risk to the downside, ... There's not much data post September 11. A quarter point cut as a precautionary measure will not be too much of a risk.
acting bank drag easier few hold leave overall rates showing signs
Manufacturing is showing a few signs of improvement. It isn't acting as a drag on overall growth, making it easier for the Bank to leave rates on hold for now.
compensate created cuts extent jobs private public sector
To some extent jobs created in the public sector will compensate for job cuts in the private sector.
billion government point pounds spending view
It's not particularly substantial. Especially if you look at it from the point of view of the more than 450 billion pounds of government spending every year.
picture service solid start uk
The big picture is essentially unaltered. It's a solid start to 2006 for the UK service sector.
above cuts inflation rate rising target view
When you've got inflation rising above the bank's target it reinforces the view that we don't need more rate cuts this year.
allowing disposable energy further higher inflation largely likely modest ongoing policy remain squeeze wage
With wage inflation still surprisingly muted and an ongoing squeeze on households' disposable incomes from higher energy costs, second-round inflation is likely to remain largely absent, allowing some further modest policy easing.
bigger deficits expected immediate medium picture remains rises risk tax term underlying
The deficits are bigger than expected but the underlying picture remains the same. The risk is that we will need tax rises in the medium term but there is no immediate pressure.
case compared help numbers rate short start
Compared with the slowdown at the start of the year, these numbers look a little healthier. In the short term, the numbers don't help the case for rate cuts.
coming count cuts emerging further increases inflation job mainly odds problem rate sort suffering wage
Job cuts are mainly coming from manufacturers, who are still suffering. We are going to see further increases in the claimant count rate and the odds of any sort of wage inflation problem emerging are diminishing rapidly.
aided consumer demand doubts extent hold looked ongoing persist price robust terms
Overall, consumer demand looked pretty robust in Q4 -- aided by ongoing price discounting -- but significant doubts persist in terms of the extent to which demand will hold up in 2006.