Six quarters of mostly below-trend growth are taking their toll. The trend in rising unemployment and muted wage pressures suggests underlying inflation in the UK could ease further, keeping the door open for a possible rate cut later this year. |
Slow growth last year is still affecting the labor market. |
Still, the precise wording of the ECB statement on Thursday could provide some vital clues. |
The bank hiked rates aggressively in late 2003 and early 2004 to cool down an economic boom fueled by an explosive rise in house prices, and clearly attained that goal. |
The ECB probably has not found a consensus yet on rate policy beyond Dec. 1. For this reason, the ECB is unlikely to provide any clear Fed-style guidance on the future course of rates, |
The evidence on U.K. consumption remains contradictory. Some data such as weak consumer confidence and the reluctance to use credit cards point to further weakness ahead. However, the modest rebound in the real estate market and anecdotal evidence of satisfactory Christmas indicate a modest strengthening in spending. |
The figures are not proof yet of an economic slowdown as they are being distorted by cutbacks in work creation programs. |
The hope that Germany would be a shining European example for accelerated reforms has been dashed, |
The last 24 hours were the worst setback for reform hopes in Europe in a long time. |
The orders data confirm that demand is very robust and we expect a significant acceleration in output growth shortly. |
There could have been a heated discussion, with the doves preventing the acceleration in the pace of rate hikes the hawks may have wanted. |
There is a reasonable chance of the bank cutting rates. |
They were slightly more dovish than I expected. There is a bit of a conflict between the bank's statement, and the numbers they gave. |
This has weakened his claim to be the one who could lecture other financial ministers on how to run their economies. He should publicly apologize to the IMF staffers whom he scolded last time for being too pessimistic on the U.K. |
This is the worst thing we've had from the German economy for some time. |