This is a really stunning retreat in retail sales. It reinforces our belief that the Bank of England is too optimistic about consumer spending. |
This is likely to put a floor under house prices, but we remain highly doubtful that house prices will move substantially higher on a sustained basis any time soon. If house prices start to accelerate markedly, we believe buyer interest will soon diminish, thereby keeping a lid on prices. |
This is likely to reinforce the central bank's concern that any further trimming of interest rates could excessively stimulate the housing market and risk send housing prices markedly higher. |
This is still a pretty benign report overall and broadly in line with Bank of England expectations contained in the February Inflation Report. |
This is still a pretty healthy report overall that suggests that the service sector has started 2006 relatively strongly. The report does little to change perceptions that the Bank of England will keep interest rates unchanged next week, and very probably for some time to come after then. |
This reinforces our belief that consumer spending will remain subdued for some time to come despite September's pick-up in retail sales. |
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. |
This subdued growth is expected to help to contain underlying inflationary pressures and risks, underpinning our belief that interest rates will be cut by a further 25 basis points in February or March. |
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. |
This very much keeps the door open for an interest rate cut in February. |
UK imports of goods excluding oil ... rose for a fourth successive month in February, and by substantial 4.5 percent, suggesting that domestic demand may have surprised on the upside in the first quarter. |
We believe house price increases will be relatively muted over the coming months, given affordability constraints, increased debt levels and muted earnings growth. |
We believe that interest rates will eventually come down by a further 25 basis points to 4.25%. |
We believe the door is opening for an interest rate cut early in 2006 if the economy fails to show sustained significant signs of improvement over the next couple of months. |
We still believe UK interest rates will eventually be trimmed by a further 25 basis points, although not until August at the earliest. |