23 Oct 2014
UK rates: lower for longer - RBS
FXStreet (Barcelona) - Analysts at RBS expect in their inflation forecast for rates to remain lower for longer.
Key Quotes:
“Our forecast is for CPI inflation to remain below target through 2015 and 2016 (grinding up to 1.8% at our December 2016 horizon)”.
“A lower starting point and more benign oil and commodity prices largely account for the lower inflation profile in the near-term, while slower economic growth (domestically and globally) is expected to result in a slower elimination of spare capacity thus weighing against a more rapid subsequent (base effect driven) pick-up in inflation in the latter part of the forecast”.
“For next month's data, we expect a moderate retracement in the core components and more demanding energy price base effects to nudge CPI up slightly in October 2014: to 1.3% on the headline rate and 1.6% on the core”.
Key Quotes:
“Our forecast is for CPI inflation to remain below target through 2015 and 2016 (grinding up to 1.8% at our December 2016 horizon)”.
“A lower starting point and more benign oil and commodity prices largely account for the lower inflation profile in the near-term, while slower economic growth (domestically and globally) is expected to result in a slower elimination of spare capacity thus weighing against a more rapid subsequent (base effect driven) pick-up in inflation in the latter part of the forecast”.
“For next month's data, we expect a moderate retracement in the core components and more demanding energy price base effects to nudge CPI up slightly in October 2014: to 1.3% on the headline rate and 1.6% on the core”.