- A few quarters of of above trend growth driven by household spending not enough for UK to escape headwinds
- Sustained recovery needed for significant productivity gains, no reason deterioration should persist
- Unemployment levels consistent with on target inflation, probably somewhat lower than MPC thought in August
- Recovery has some way to run before appropriate to consider moving away from emergency monetary policy
- Signs UK inflations pressures are more contained and reinforces case for no immediate rate hike
- MPC will review how to evolve guidance in Feb
- Move away from emergency policy would be gradual, rates in medium term would be somewhat lower than before crisis
Mark Carney taking the stage at Davos.
Not really anything different to what Eamonn had earlier but the note on rates has knocked cable down to 1.6564.
Noting the term “evolving guidance” is what will get the market chattering about moving targets and thresholds.
Ma