CITY A.M. | SHADOW MPC
ALLISTER HEATH | CITY A.M
“The money supply is growing at a faster rate and while the PMI stats are slightly weaker, there will be no double-dip. Fiscal tightening won’t cause a recession. Inflation is too high so rates must go up by 0.25 per cent.”
SIMON WARD | HENDERSON
“Hike by 25 basis points. Faster money growth and rising consumer expectations imply an increased risk of the current inflation overshoot becoming entrenched without an early normalisation of policy.”
GEORGE BUCKLEY | DEUTSCHE BANK
“Concerns about a double-dip in economic growth alongside euro area banking and sovereign debt risks suggest the Bank of England should leave rates unchanged at their current exceptionally low level this month.”
MICHAEL SAUNDERS | CITIGROUP
“There is growing – and valid –anxiety over the scale of the recent inflation overshoot. But with aggressive fiscal tightening, the MPC will surely hold. We expect no change in 2010 unless long-term inflation expectations surge.”
VICKY REDWOOD | CAPITAL ECONOMICS
“The MPC should hold its nerve and wait to see if inflation falls, before being panicked into a rate hike. The fiscal squeeze might even mean more quantitative easing is yet needed.”
TREVOR WILLIAMS | LLOYDS TSB
“Keep rates on hold into 2011 until recovery is secured. Money supply growth could yet weaken anew and financial markets seem more worried about deflation than about inflation thanks to fiscal tightening.”
HOWARD ARCHER | IHS GLOBAL INSIGHT
“No change. Serious threats to already muted recovery stem from the extra fiscal tightening that has been announced as well as from the Eurozone’s problems. There are signs that inflation is starting to head down.”
JAMIE DANNHAUSER | LOMBARD STREET RESEARCH
“The Budget suggests a slightly more restrictive fiscal stance. The MPC shouldn’t move now but they could raise rates before year-end given likely near-term growth and an upward move in inflation expectations.”
GRAEME LEACH | IOD
“We don’t think that there needs to be any change in rates or QE this month. Broad money growth has accelerated recently but it is too early to be sure this will be sustained and so policy should remain on hold.”