Rate cuts due next year as UK growth slows

Today's Bank of England Inflation Report contains a whiff of stagflation in its latest economic projections. Inflation is heading higher, at least in the short-run, while growth risks are to the downside:

In the central projection, higher energy and import prices push inflation above the target in the near term. Inflation then falls back to settle around the target in the medium term. The risks to growth are on the downside, while those to inflation are balanced.

The Bank expects tighter credit conditions and a slowing in domestic demand will slow UK growth to around 2% in 2008. While this is in line with private sector forecasts, I would not be surprised to see sub-trend growth dip towards 1.5% next year. Governor Mervyn King was ceretainly rather gloomy at today's press conference (webcast here). According to a Bloomberg report he warned that:

The central projection is for growth to slow sharply in the next year. ...There has been some tightening of credit. Residential and commercial property investment are likely to moderate, possibly quite sharply.

The Bank's latest forecasts are based on market assumptions that they will cut base rates by 25bp in the first quarter of next year. Indeed, financial markets are now expecting not just one 25bp cut around February 2008, but have also priced in a second cut around May 2008, which would bring official cash rates back to 5.25%.

New Chancellor Alistair Darling will certainly have his work cut out keeping budget and revenue projections on track. But at least British home owners can look forward to lower mortgage rates next year.

Comments

[Bryan S.]

Is it surprising that both the U.S. and the U.K. are having credit crunches at the same time?

[David hogard]

Investing in cross border investment property has always been an area much loved by the rich and the famous. Below are three reasons why people might want to consider investing in a real estate investment property in the UK.

http://propertyinvestment.blogebay.com/2009/11/11/reasons-for-why-purchase-an-investment-property-in-uk/

[travesti video]

very successful thanks

This article is very beautiful, I really get very beyendım text files manually to your health as you Travesti very beautiful and I wish you continued success with all respect ..

Thanks for helpful information Travesti siteleri you catch up us with your sagol instructional çok explanation.
en iyi travestiler en guzel Travestiler

Travesti
Travestiler
Travesti siteleri
Travesti video
Travesti
Travesti
Travesti
sohbet
organik
güncel blog
Travesti

[roanoke va real estate]

Actually what consumers estimates of the precise rate of future house price growth has not been a good measure of turning points in the market,once a general trend in expectation has been formed its effect is likely to be highly influential on both transactions and price levels.

[travesti]

thnk admin for this site

[travesti]

Blog provide more fun in different environments where we come here to follow us as we look to the user admin travesti - travesti - escort - travesti - travesti shp gallery

[ersince]

Thanks for sharing. To explain and understand a subject very smooth brain certainly needed.

The poets and poems here are a few words about the look.
şiir perisi
şiirler
şairler
güzel sözler
welcome
porn
sohbet
chat
Aşk sözleri
Thanks you
adult

[b2b seo service]

In fact, what the consumers think that the precise rate of future growth in housing prices was not a good indicator of turning points in the market, once a general trend in expectation has been formed its effect is likely to be very influential on both transactions and price levels.

[Buy Adderall]

TO BE SUCCESSFUL AT THEIR job, internal auditors must be able to write, speak, and listen effectively.

[buy codeine]

Additionally, listening is difficult because people don't work as hard at it as they should.

[Buy Adderall]

Internal auditors must listen to explanations, rationales, and defenses of financial practices and procedures

[Buy Adderall]

About one third of total Danish employment is in the public sector

[Buy hydrocodone]

Langenbrunner had assisted on their third goal before Sutter rebuked him for laziness in the defensive end

[Buy hydrocodone]

But, I’ve never once held something personal against a player from a confrontation

[erotic shop]

Hello Yes Internal auditors must listen to explanations, rationales, and defenses of financial practices and procedures

[cem]

travesti

[Maria]

Çilek sex shop Mağzamızda En Kaliteli sex ürünleri, sex oyuncakları şişme bebek ve erotic shop erotik giyim Ürünlerini Bulabileceğiniz Gibi Ayrıca, penis büyütücü, geciktirici, Bayan Uyarıcı, Ürünlerde Temin Edebilirsiniz. 1994 ten Bu Yana En Kaliteli Orjinal Erotik Ürünlerini Sağlamakta Olan Çilek Erotik Shop ta Tüm Cinsel Ürünleri Bulabilirsiniz

[ankara travestileri]

http://www.ankaralitravestiler.com

[horkes]

Remove it from the loud sound described as among the People of the individual during sleep, especially in the medical sense, the most common cause of snoring soft palate observed in adults, little more than normal growth of the tongue, the muscles sag and lose tension and blockage of the airway during sleep titresmesidir little of the language.

[Las Vegas homes]

Investment in real estate and investment across borders has always been a much loved region of the rich and famous. Here are three reasons why people might want to consider investing in real estate investment property in the UK.

[diş beyazlatma kalemi]

Save the essence of life in the treatment of skin allantoinle Snail! This essence creates a bad appearance and have no choice tahribatlarının skin no longer be removed even if the so-called cracks.

Nature of this herbal solution effectively and safely as possible to get rid of sivilcelerinizden! Skin care products on behalf of the choice deliberately choose to adhere and creams containing natural formulas that you keep the fault

[extra jel]

As millions of people who want to lose weight, but youDid he can not succeed in a kind of worry about your weight yanıyorsunuz more? You might think, and this process will be much easier to lose weight in a healthy way to get over ... Now a much more difficult as it used to have a nice view, but you have to do is that you want to attenuation.

[Wholesale]

What an amazing shopping enjoyment. I like it very much, I will come next time, thank you for your service and I am satisfied with it.