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8 Jan 2015
Focus to be on MPC’s assessment of the expected CPI fall – RBS
FXStreet (Barcelona) - Ross Walker, Senior UK Economist at RBS, shares that MPC left policy unchanged as expected, but the focus remains on MPC’s assessment of the anticipated fall in December’s CPI, further forecasting UK’s December CPI to fall to 0.6% y/y in December.
Key Quotes
“The MPC left policy settings unaltered in January, as was universally expected. The Minutes and vote will be published at 09:30 on Wednesday 21 January – we expect another 7-2 vote, with Mssrs Weale and McCafferty voting for a 25bp rise in Bank Rate.”
“The main interest in the January Minutes will centre on the MPC's assessment of the expected fall in CPI inflation in December – although these inflation data will not be made public until 09:30 on Tuesday 13 January, the MPC will have had advance notification of the data (pre-release access gives 3.5 working days advance notice for CPI data).”
“The RBS forecast is for CPI inflation to fall to around 0.6% y/y in December from 1.0% in November. This would be the lowest CPI outturn since it became the policy target in 2004 and the first downside breach (ie, deviating by more than 1% point from its 2% target) – there have been plenty of breaches to the upside!”
Key Quotes
“The MPC left policy settings unaltered in January, as was universally expected. The Minutes and vote will be published at 09:30 on Wednesday 21 January – we expect another 7-2 vote, with Mssrs Weale and McCafferty voting for a 25bp rise in Bank Rate.”
“The main interest in the January Minutes will centre on the MPC's assessment of the expected fall in CPI inflation in December – although these inflation data will not be made public until 09:30 on Tuesday 13 January, the MPC will have had advance notification of the data (pre-release access gives 3.5 working days advance notice for CPI data).”
“The RBS forecast is for CPI inflation to fall to around 0.6% y/y in December from 1.0% in November. This would be the lowest CPI outturn since it became the policy target in 2004 and the first downside breach (ie, deviating by more than 1% point from its 2% target) – there have been plenty of breaches to the upside!”