UK Datanote: U.K. MPC Decision, Minutes & Monetary Policy Report, May

• In one line: On track for no change in June; the MPC has set a high bar for further upside surprises to its forecasts.

Samuel Tombs (UK Economist)U.K.

UK Datanote: U.K. MPC Decision & Minutes, March

• In one word: Overkill.

Samuel Tombs (UK Economist)U.K.

UK Datanote: U.K. MPC Decision, Minutes & Monetary Policy Report, February

• In one line: Low medium-term inflation forecasts signal the MPC doesn’t intend to hike rates any further.

Samuel Tombs (UK Economist)U.K.

12 Jan 2023 UK Monitor CPI Inflation Likely Undershot the MPC's Forecast Again in December

• CPI inflation likely fell to 10.3% in December, from 10.7% in November, a hefty 0.6pp below the MPC’s forecast.
• Motor fuel prices plunged in December, while flash Eurozone data point to a further slowing in food price rises.
• Evidence is mixed on core goods price momentum, but the usual surge in airfares won’t lift the services CPI much.

Samuel Tombs (UK Economist)U.K.

UK Datanote: U.K. MPC Decision & Minutes, December

• In one line: No strong signals on the terminal rate, but the crumbling of hawkish dissent suggests we are close.

Samuel Tombs (UK Economist)U.K.

28 Nov 2022 UK Monitor Sterling is Not Out of the Woods Yet

Sterling's rally has been driven by the elimination of the fiscal risk premium, which we doubt will return... 

...But the current account deficit will remain large next year, despite the recession, leaving sterling vulnerable. 

The MPC likely will hold back from raising Bank Rate as far as markets expect; we look for $1.15 in the spring. 

Samuel Tombs (UK Economist)U.K.

24 Nov 2022 UK Monitor PMI Data Still Point to a Recession and Intense Price Pressures

• S&P's survey points to another 0.2% q/q drop in GDP in Q4 and the likelihood of a faster decline in Q1.
• The employment index remained slightly above its long-run average, but it tends to lag the PMI.
• Output prices still are rising too fast for the MPC to tolerate, but leading indicators point to a slowing soon.

Gabriella DickensU.K.

16 Nov 2022 UK Monitor Stable Employment in Q3 Shouldn't Undermine Conviction in Future Falls

• Employment essentially held steady in Q3, despite the fall in GDP; vacancies have remained at a high level too.
• But the rise in corporate borrowing costs looks set to be sharp enough to spark a wave of redundancies next year.
• Wage growth was far too strong for the MPC too tolerate in September, but timelier data point to a slowdown.

Samuel Tombs (UK Economist)U.K.

UK Datanote: U.K. MPC Decision & Minutes, November

• In one line: New forecasts and guidance suggest the end of the hiking cycle is near.

Samuel Tombs (UK Economist)U.K.