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5 Feb 2015
UK inflation could descend further – Rabobank
FXStreet (Edinburgh) - According to strategists at Rabobank, UK’s consumer prices would still have some room to fall.
Key Quotes
“UK CPI inflation is set to continue falling in the coming months largely on the back of the sharp descent in oil prices”.
“The minutes of the January MPC meeting suggest that the Bank sees the chances of a dip below zero by UK CPI inflation during H1 2015 as roughly evenly balanced”.
“It is in the context of a lower for longer inflation rate that MPC members McCafferty and Weale gave up their call for an immediate tightening in monetary policy this month”.
“However, both these members maintain the belief that the fall in inflation will be temporary and that it was unlikely to materially affect the behaviour of households and businesses in such a way that it becomes perpetuating”.
“They also noted that wage growth had become more buoyant than had been expected – a factor which should support consumption growth and inflation going forward”.
“In the near-term, however, UK CPI inflation will fall further, the only uncertainty is over how much it will fall.
Key Quotes
“UK CPI inflation is set to continue falling in the coming months largely on the back of the sharp descent in oil prices”.
“The minutes of the January MPC meeting suggest that the Bank sees the chances of a dip below zero by UK CPI inflation during H1 2015 as roughly evenly balanced”.
“It is in the context of a lower for longer inflation rate that MPC members McCafferty and Weale gave up their call for an immediate tightening in monetary policy this month”.
“However, both these members maintain the belief that the fall in inflation will be temporary and that it was unlikely to materially affect the behaviour of households and businesses in such a way that it becomes perpetuating”.
“They also noted that wage growth had become more buoyant than had been expected – a factor which should support consumption growth and inflation going forward”.
“In the near-term, however, UK CPI inflation will fall further, the only uncertainty is over how much it will fall.