The BoE sees inflation above target by 2017 as wage pressures build, despite near-term deflation risks
• We lower our 2015 inflation forecast, but see medium-term inflation risks triggering a rate hike in Q4-2015
• With a hung parliament increas...
RGI rose 1.2% m/m in November; trade settlement is a key driver, as 22% of China’s trade settled in RMB
• By end-2015, we expect the RGI to reach 2,500 and Renminbi deposits in Hong Kong to reach CNY 1.05tn
• Dim Sum issuance this year should be ...
In a dovish Inflation Report, the BoE cut its inflation forecasts, signalling no rate hike until late 2015
• We push back our first-rate-hike expectation to Q3-2015 (previously Q1-2015), cut our inflation forecasts
• We revise our GBP-USD forecast...
Scotland appears to have voted to stay in the UK; this should boost markets, but major issues remain
• The UK faces ongoing political uncertainty ahead of the May 2015 general election, and slowing growth
• FX implications: We expect an initial GB...
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The UK has edged closer to a rate hike, but recovery is still in its early stages and slack remains
• The BoE still sees a rate hike a year away; we expect a move in Q1-2015
• Carney’s comments will likely slow the rise in Gilt yields; we see posi...
An independent Scotland would be negative for UK trade, but positive for the UK’s fiscal position
• GBP weakness on a ‘Yes’ would be temporary, but option vol looks cheap ahead of the referendum
• The margin between ‘Yes’ and ‘No’ votes narrowed ...
• Spare capacity is key for BoE policy makers: by Q4-2014, less slack in the labour market should trigger concerns over the medium-term inflation outlook
• We expect a measured hiking path equivalent to 25bps each quarter from Q1-2015 through 2016
The BoE drops its unemployment threshold and is now focusing on spare capacity and productivity
• Economic slack could be eliminated by early 2015, with unemployment reaching equilibrium by late 2014
• We revise up our 2014-15 GDP forecast, cut 20...
GDP growth is strong, but faster productivity growth should delay BoE rate hikes until 2016
• Supply-side constraints and higher CPI expectations are the key risks around the BoE’s rate trajectory
• FX – The GBP is starting to look vulnerable to...
The BoE’s 7% unemployment rate threshold is an ‘easily understood’ measure of slack in the economy
• We revise up our GDP growth forecast, but see inflation low by 2015 and push rate hikes to H2-2016
• FX: GBP will now be more sensitive to UK empl...
GBP weakness has accelerated in recent weeks as UK fundamentals continue to deteriorate
• We expect additional easing from the BoE to weigh further on GBP while fiscal pressures build
• We have lowered our GBP forecasts and downgraded our medium-t...
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