5 Dec 2014
Outlook for the UK economy - RBS
FXStreet (Barcelona) - Ross Walker, Senior UK Economist at RBS, shares his outlook for the UK economy for 2015, forecasting a lower CPI projection due to the global disinflationary influence.
Key Quotes
“Our principal forecast change is a lowering of our CPI inflation projection, partly to reflect disinflationary global influences but also evidence of keener domestic price competition in response to the prolonged household income squeeze.”
“Softer inflation, a resumption of significant and sustained fiscal policy tightening, elevated political risk and weaker external demand have prompted us to push our forecast for the first Bank Rate rise out to Q1 2016 from Q3 2015.”
“Our dovish 'terminal rate' view remains intact (c.2% at end-2017). The main risks to this dovish view are any sharper than expected rise in wage inflation and more bullish corporate sector behaviour (capex & hiring).”
Key Quotes
“Our principal forecast change is a lowering of our CPI inflation projection, partly to reflect disinflationary global influences but also evidence of keener domestic price competition in response to the prolonged household income squeeze.”
“Softer inflation, a resumption of significant and sustained fiscal policy tightening, elevated political risk and weaker external demand have prompted us to push our forecast for the first Bank Rate rise out to Q1 2016 from Q3 2015.”
“Our dovish 'terminal rate' view remains intact (c.2% at end-2017). The main risks to this dovish view are any sharper than expected rise in wage inflation and more bullish corporate sector behaviour (capex & hiring).”