28 Nov 2014
BoE: No rush to hike - Raboabank
FXStreet (Guatemala) - Analysts at Rabobank explained that the tone of the Bank of England’s November Inflation Report was decidedly dovish.
Key Quotes:
“The Bank warned that CPI inflation was “more likely than not to fall temporarily below 1% at some point over the next six months” and not return to the 2% target until the end of the forecast period. Signs of disinflation in the UK are clearly evident in the CPI and PPI inflation data”.
“Some of the weakness in inflation can be explained by weak food and energy prices, but soft demand has been a contributing contributing factor”.
“In the UK signs of real pay increases are only just beginning to emerge after several years of falls. In view of the low inflationary backdrop, it is clear that there is no need for the BoE to be in any rush to hike interest rates despite the improved levels of economic activity in the UK economy”.
“As a result we have pushed back our forecast for the timing of the first BoE interest rate hike to August 2015 from a previous call of May 2015 at the earliest”.
Key Quotes:
“The Bank warned that CPI inflation was “more likely than not to fall temporarily below 1% at some point over the next six months” and not return to the 2% target until the end of the forecast period. Signs of disinflation in the UK are clearly evident in the CPI and PPI inflation data”.
“Some of the weakness in inflation can be explained by weak food and energy prices, but soft demand has been a contributing contributing factor”.
“In the UK signs of real pay increases are only just beginning to emerge after several years of falls. In view of the low inflationary backdrop, it is clear that there is no need for the BoE to be in any rush to hike interest rates despite the improved levels of economic activity in the UK economy”.
“As a result we have pushed back our forecast for the timing of the first BoE interest rate hike to August 2015 from a previous call of May 2015 at the earliest”.