Forex News: The clear step up in hawkishness from the Bank of England's MPC of late suggests in the current, difficult inflation environment the bank will likely remain on the sidelines for longer than expected, but with a bias toward easing rather than tightening, says UniCredit economist Chiara Corsa. However, this delayed monetary response will contribute to GDP coming in well below potential throughout 2009 - UniCredit looks for 1.5% growth in '08, 0.9% in '09. Says prolonged GDP sluggishness, and a shaky labor market will keep core inflation at bay, and allow faster inflation deceleration than the BOE is currently penciling in. Unicredit sees the BOE easing in early '09, with risk skewed between November and December '08, and rates at 4% by the end of '09. (
0 comments:
Post a Comment