The economy seems to be on a worrying downward trajectory. But if activity were about to fall off a cliff, we might expect forward-looking measures of confidence and expectations to be tumbling and this does not seem to be the case.
Although there was renewed talk among commentators of possible interest rate cuts following last week’s surveys, we doubt that the MPC will be seriously considering this at May’s meeting. It said at last month’s meeting that it would be treating all economic data with caution given potential referendum effects – which will presumably be reversed if the UK votes to stay in the EU.
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