Ransquawk Overnight UK News 23/11/07

Discussion in 'Trading' started by Ransquawk, Nov 23, 2007.

  1. Ransquawk

    Ransquawk ET Sponsor

    BoE deputy governor Rachel Lomax spoke last night in Hull giving insight into both the upside and downside risks to the UK economy. Lomax said the MPC's dilemma comes from high energy prices, which pose an upside risk, and the impact of the credit squeeze, which creates a downside growth risk. This has lead to a number of the UK papers putting a different spin on the comments.

    The Times writes that hopes for an imminent cut in interest rates next month or by early next year were dampened last night as Lomax warned of big uncertainties over prospects for growth and inflation. However, the Daily Telegraph reported that Lomax raised fresh hopes of a cut when she warned that the credit crisis could lead to falls in house prices and the stock market and trigger a damaging loss of confidence.

    Other notable comments were that Lomax sees current UK rates may be on the restrictive side and that now is the time to pay extra attention to the emerging data, with all forecasts including the BoE forecasts to be taken with a large pinch of salt. This data dependent line echoing recent Mervyn King comments. Lomax also spoke on BBC radio this morning saying that the economy is slowing from growing quite briskly.

    In the first hour of trading the short sterling strip was up 3 ticks across the strip with the markets interpreting the comments dovishly.

    In other news, the CBI chief said that the credit crunch will hit the real economy, with the CBI revising down its growth forecast for next year from 2.5% to just over 2%. (Times)

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