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
UK Data Response Nat. Accounts, Bal. of Payments (Q3) & MPC mins. (Dec.) The raft of UK data released today did little to improve the prospects for the economy next year, highlighting a number of reasons to be concerned over the sustainability of the recovery. 22nd December 2010 · 1 min read
Bank of Japan Watch Bank of Japan looks overseas for salvation The Bank of Japan left policy on hold today, as universally expected, while the accompanying statement lent heavily on hopes of a strong recovery in the rest of the world. The problems at home were... 21st December 2010 · 1 min read
UK Economics Weekly Is the MPC's credibility really in danger? Last week’s November CPI figures showing inflation rising again to 3.3% has prompted further concerns that the Monetary Policy Committee is in danger of losing its anti-inflation credibility. A year... 20th December 2010 · 1 min read
Latin America Economics Update Chilean rates edge higher but future pace of tightening will slow The Central Bank of Chile (CBC) hiked interest rates by 25bps to 3.25% last night, as expected. But the tone of the accompanying statement was less hawkish than in previous months, reinforcing our... 17th December 2010 · 1 min read
Emerging Europe Economics Update Turkey takes a bold step to stem speculative inflows Tonight’s decision by the Central Bank of Turkey (CBRT) to cut its benchmark interest rate by 50bps to 6.5% is a bold step aimed at slowing speculative capital inflows. Ultimately it may have to be... 16th December 2010 · 1 min read
Latin America Economics Update Could the next move in Brazilian rates be down? The incoming administration in Brazil has a historic opportunity to re-balance the policy mix in favour of tighter fiscal policy and looser monetary policy (and a weaker currency). What’s more, there... 16th December 2010 · 1 min read
Bank of Japan Watch Further substantial easing to come The Bank of Japan’s Policy Board is unlikely to announce any major policy initiatives at the two-day meeting which concludes next Tuesday. However, we continue to think that the central bank will have... 16th December 2010 · 1 min read
