9 Jan 2015
UK CPI inflation heads for historic low – RBS
FXStreet (Barcelona) - Ross Walker, Senior UK Economist at RBS, forecasts UK CPI inflation to fall to 0.6% in December, further noting that the chances for a bank rate hike in 2015 now looks meek.
Key Quotes
“The RBS forecast is for CPI inflation to fall to 0.6% in December – the lowest outturn since CPI became the inflation target in 2004 and, symbolically, prompting the first letter from the BoE Governor to the Chancellor in response to inflation deviating by more than one percentage point to the downside.”
“The MPC will look through the 'first round' effects of lower oil and commodity prices, but with a still unconvincing economic recovery and increasingly pervasive disinflation globally, alongside rising political risk and an imminent fiscal policy tightening domestically, the chances of a Bank Rate rise in 2015 appear to be receding further.”
Key Quotes
“The RBS forecast is for CPI inflation to fall to 0.6% in December – the lowest outturn since CPI became the inflation target in 2004 and, symbolically, prompting the first letter from the BoE Governor to the Chancellor in response to inflation deviating by more than one percentage point to the downside.”
“The MPC will look through the 'first round' effects of lower oil and commodity prices, but with a still unconvincing economic recovery and increasingly pervasive disinflation globally, alongside rising political risk and an imminent fiscal policy tightening domestically, the chances of a Bank Rate rise in 2015 appear to be receding further.”