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13 Nov 2014
BoE unambiguously more dovish - ANZ
FXStreet (Bali) - The Bank of England’s (BoE) Quarterly Inflation Report (QIR) reflected an unambiguously more dovish outlook for the UK economy, notes ANZ Research Team.
Key Quotes
"The Bank of England’s (BoE) Quarterly Inflation Report (QIR) reflected an unambiguously more dovish outlook for the UK economy. The forecast for inflation was revised down significantly in large part due to offshore influences – food and energy prices and disinflation in the UK’s trading partners (most notably, the euro area). While not permanent, these influences currently weighing on inflation are expected to persist in the short term."
"The BoE noted the strong probability that annual headline inflation may fall below 1% over the next six months, and it doesn’t expect inflation to return to its 2% target until the end of its forecast horizon (the end of 2017). That makes it difficult to justify a rise in the official policy rate in the near term. Expectations for interest rate normalisation have naturally been pushed backed further."
Key Quotes
"The Bank of England’s (BoE) Quarterly Inflation Report (QIR) reflected an unambiguously more dovish outlook for the UK economy. The forecast for inflation was revised down significantly in large part due to offshore influences – food and energy prices and disinflation in the UK’s trading partners (most notably, the euro area). While not permanent, these influences currently weighing on inflation are expected to persist in the short term."
"The BoE noted the strong probability that annual headline inflation may fall below 1% over the next six months, and it doesn’t expect inflation to return to its 2% target until the end of its forecast horizon (the end of 2017). That makes it difficult to justify a rise in the official policy rate in the near term. Expectations for interest rate normalisation have naturally been pushed backed further."