Cable hovering around session low, presently 1.5570.
- Inflation to fall sharply in 2012, will be at low 3% level by March
- Behaviour of CPI from Spring 2012 onwards more uncertain, more important for future monetary policy
- Much of UK’s weak 2011 growth can be blamed on unavoidable fall in real living standards due to high cost for energy and imports
- Euro zone crisis casting shadow over UK prospects for 2012
- Near-term growth outlook has weakened very materially
- Risk bank funding constraints will lead to tighter credit conditions
- Hard to know how deep and persistent growth slowdown will be, hinge on euro zone
