17 Jun 2014
The BoE’s debate - BBH
FXStreet (Guatemala) - Marc Chandler, Global Head of Currency Strategy at Brown Brothers Harriman explained that the real debate at the BOE is over the extent of economic slack.
Key Quotes:
The decline in prices now does not seem to reflect such macro conditions."
"Instead, for example, downward pressure on prices came from the supermarket price competition. Food and (non-alcoholic) beverage prices are off 0.6% over the past year, the first y/y decline in 8 years and the largest decline in nearly a decade."
"Transport prices fell as fare increases over Easter were unwound. That said, there does not appear to be price pressures in the pipeline."
"Input prices fell 5% y/y. The consensus was for a 4.1% decline."
"Output prices fell l 0.1% in May and are up 0.5% from a year ago. On the other hand, the government separately reported that house prices increased by 9.9% in April, the strongest level in 4 years."
"In London, house prices rose 18.7%. The idea that tame inflation will boost consumption may not be borne out in the retail sales data due out on Thursday. The consensus expects a correction to the heady 1.3% rise in April, with around a third given back in May."
Key Quotes:
The decline in prices now does not seem to reflect such macro conditions."
"Instead, for example, downward pressure on prices came from the supermarket price competition. Food and (non-alcoholic) beverage prices are off 0.6% over the past year, the first y/y decline in 8 years and the largest decline in nearly a decade."
"Transport prices fell as fare increases over Easter were unwound. That said, there does not appear to be price pressures in the pipeline."
"Input prices fell 5% y/y. The consensus was for a 4.1% decline."
"Output prices fell l 0.1% in May and are up 0.5% from a year ago. On the other hand, the government separately reported that house prices increased by 9.9% in April, the strongest level in 4 years."
"In London, house prices rose 18.7%. The idea that tame inflation will boost consumption may not be borne out in the retail sales data due out on Thursday. The consensus expects a correction to the heady 1.3% rise in April, with around a third given back in May."