27 Oct 2015
UK 3Q GDP growth likely to fall below consensus – RBS
FXStreet (Delhi) – Brian Daingerfield, FX Trading Strategist at RBS, suggests that the moderation in UK economic indicators may continue, and we are below the consensus on 3Q GDP growth.
Key Quotes
“Our independent research economists expect GDP growth of just 0.5% q/q, slightly below the consensus and also below the 0.6% q/q level Governor Carney cited as needed to reduce the positive output gap.”
“Even amid a softening growth outlook, we are concerned that the Bank of England’s MPC is not yet ready to signal an overtly more dovish outlook on the Bank Rate at the November Quarterly Inflation Report. There seems to be a sense of discomfort on the MPC with market pricing of the Bank rate if expectations for the first rate hike are pushed out beyond one year.”
“In comments over the weekend, Governor Carney acknowledged that rate hikes are not a certainty but added that the British people should be prepared for the prospect of higher interest rates at some point. That line of commentary urging preparedness for higher rates, albeit uncertain, seems to fit with the MPC attempting to keep rate hike expectations from becoming too dovish.”
Key Quotes
“Our independent research economists expect GDP growth of just 0.5% q/q, slightly below the consensus and also below the 0.6% q/q level Governor Carney cited as needed to reduce the positive output gap.”
“Even amid a softening growth outlook, we are concerned that the Bank of England’s MPC is not yet ready to signal an overtly more dovish outlook on the Bank Rate at the November Quarterly Inflation Report. There seems to be a sense of discomfort on the MPC with market pricing of the Bank rate if expectations for the first rate hike are pushed out beyond one year.”
“In comments over the weekend, Governor Carney acknowledged that rate hikes are not a certainty but added that the British people should be prepared for the prospect of higher interest rates at some point. That line of commentary urging preparedness for higher rates, albeit uncertain, seems to fit with the MPC attempting to keep rate hike expectations from becoming too dovish.”