Meryn King is not venturing too far out on a limb to forecast the UK recovery. He says the MPC will wait for conditions to become clearer before deciding on the future of QE. CPI will pick up markedly in the first half of the year but will be temporary, he says.
Cable is pulling back as Brown downplays today;s inflation spike and plays coy on ending QE, playing wait and see. We trade at 1.6365 from 1.6385.