30 Oct 2013
Flash: BoE concerns for inflation? - Rabobank
FXstreet.com (London) - Research teams at Rabobank said there is speculation that the BoE could gradually start to re-focus its attention away from putting in place the building blocks of recovery and back to the risks associated with inflation.
Key Quotes:
“UK GDP growth registered 0.8% q/q in the third quarter. This builds on the 0.7% q/q expansion registered in Q2. The pace of growth registered during the past two quarters is fairly normal for a post recessionary period but it is far greater than either the market consensus or the BoE had anticipated for this year”.
“The result is a rise in speculation that the Bank could gradually start to re-focus its attention away from putting in place the building blocks of recovery and back to the risks associated with inflation”.
“Recent survey evidence that inflation expectations may be less well anchored is not good news. That said the headwinds to growth are still severe and it will be a long time before the BoE tightens policy”.
“While rates are set to be on hold for a prolonged period from this point, in the months ahead the market will be focusing its attention on whether or not the BoE will alter its forward guidance to suggest a rate hike could be earlier in 2016 than is currently projected”.
Key Quotes:
“UK GDP growth registered 0.8% q/q in the third quarter. This builds on the 0.7% q/q expansion registered in Q2. The pace of growth registered during the past two quarters is fairly normal for a post recessionary period but it is far greater than either the market consensus or the BoE had anticipated for this year”.
“The result is a rise in speculation that the Bank could gradually start to re-focus its attention away from putting in place the building blocks of recovery and back to the risks associated with inflation”.
“Recent survey evidence that inflation expectations may be less well anchored is not good news. That said the headwinds to growth are still severe and it will be a long time before the BoE tightens policy”.
“While rates are set to be on hold for a prolonged period from this point, in the months ahead the market will be focusing its attention on whether or not the BoE will alter its forward guidance to suggest a rate hike could be earlier in 2016 than is currently projected”.