Latin America Economics Update Chilean rates on hold, but further hikes are likely Last night, the Central Bank of Chile (CBC) held interest rates at 3.25% but highlighted the need for further monetary tightening. Accordingly, we are sticking to our below-consensus forecast for... 14th January 2011 · 1 min read
Bank of Canada Watch Rising financial risks spell trouble The Bank of Canada is widely expected to hold the key policy interest rate at 1% on Tuesday. More importantly, we expect it to hold the policy rate at 1% throughout this year. This is in contrast to... 14th January 2011 · 1 min read
Europe Economics Update ECB remains reluctant to do more After leaving interest rates on hold, the ECB provided no indication that it is about to respond to the ongoing euro-zone fiscal crisis by adopting bolder unconventional policy measures. 13th January 2011 · 1 min read
UK Economics Update MPC not panicking yet The Monetary Policy Committee is coming under fire for leaving policy unchanged – as it did again today – in the face of rising near-term price pressures. But we doubt that the Committee has much to... 13th January 2011 · 1 min read
Asia Economics Update The Bank of Korea still has more work to do The Bank of Korea (BoK) lifted its policy rate by 25bp to 2.75% today, which was in line with our forecast but surprised the consensus. Policymakers have rightly become more focused on inflation and... 13th January 2011 · 1 min read
Asia Economics Update Bank of Thailand to continue tightening The Bank of Thailand (BoT) raised its policy rate by 25bp to 2.25% today, as expected. Growth is likely to pick up during the course of this year, and will be led by strengthening domestic demand and... 12th January 2011 · 1 min read
Asia Economics Update Sri Lanka goes for growth The Central Bank of Sri Lanka (CBSL) unexpectedly cut its two policy rates at today’s meeting. Inflation accelerated at the end of last year while the economic upswing is set to stay strong... 11th January 2011 · 1 min read
Europe Economics Update Portugal - the end of Act 1? It now seems a matter of when, rather than if, Portugal will follow Greece and Ireland in accepting some form of European/IMF bail-out. But will this signal the beginning of the end of the euro-zone... 11th January 2011 · 1 min read
UK Economics Update Will the MPC be panicked into raising rates? The build-up of near-term price pressures has prompted a widespread re-think of when, and how far, interest rates will start to rise. While a near-term rate hike certainly now looks more possible, we... 11th January 2011 · 1 min read
Asia Economics Weekly Bank of Korea set to hike policy rates again We expect Korea’s central bank to lift its policy rate by 25bp to 2.75% on Thursday. This is in contrast to the consensus view which forecasts no change. The worst of the slowdown looks to have come... 10th January 2011 · 1 min read
Latin America Economics Update Peruvian rates heading to 4.5% Last night, the Central Reserve Bank of Peru (BCRP) unexpectedly hiked interest rates by 25bps to 3.25%. With the economy set to grow by 6% this year and the outlook for inflation deteriorating, we... 7th January 2011 · 1 min read
ECB Watch ECB to stand pat amidst conflicting forces Once again, the ECB faces the tough task of balancing a raft of bad news from the euro-zone’s periphery with the more positive developments elsewhere and the fact that CPI inflation has risen above... 6th January 2011 · 1 min read
BoE Watch MPC to hold its nerve as inflation rises If inflation expectations continue to increase, the Monetary Policy Committee (MPC) will no doubt seriously consider a ‘token’ interest rate rise. But for now, it still seems wedded to its view that... 6th January 2011 · 1 min read
UK Economics Update VAT inflation effects shouldn't panic the MPC Perhaps the biggest risk facing the household sector is the possibility of a near-term interest rate rise. We do not think that a modest rate rise would have a disastrous effect on household incomes... 5th January 2011 · 1 min read
Asia Economics Update The first Indonesia rate hike looks close Bank Indonesia (BI) left its reference rate unchanged today at 6.5%, as was universally expected. Nevertheless, the reference rate is now negative in real terms while inflation will probably... 5th January 2011 · 1 min read
UK Economics Update Monetary Indicators Monitor (Dec.) Broad money growth is still heading in the wrong direction. Bank lending remains weak too, and we continue to expect relatively tight credit conditions to act as a brake on the economic recovery in... 4th January 2011 · 1 min read
