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13 Aug 2014
Adjustments to CPI projections the highlight of BoE's August Inflation Report - RBS
FXStreet (Łódź) - The RBS team of analysts believe that the most important takeaway from the BoE August Inflation Report was the fact that the MPC lowered the inflation forecast at 2-year point (1.77% from 1.89%) and barely altered at 3-year point (1.96% vs 1.95%).
Key quotes
"So a slightly larger undershoot over the policy-sensitive 2-3 year forecast period as a whole, but an essentially unchanged/at-target forecast at 3-years."
"There was no change to the (neutral) skew of the forecast."
"Overall, this gives the Report a marginally dovish feel. "
"At any rate, had the MPC been materially closer to raising Bank Rate then we would have expected a higher CPI projection."
"A high degree of uncertainty surrounds the timing of the first hike but we feel marginally more confident about our forecast for the first Bank Rate rise to come in February 2015 than we had done prior to the August Report."
Key quotes
"So a slightly larger undershoot over the policy-sensitive 2-3 year forecast period as a whole, but an essentially unchanged/at-target forecast at 3-years."
"There was no change to the (neutral) skew of the forecast."
"Overall, this gives the Report a marginally dovish feel. "
"At any rate, had the MPC been materially closer to raising Bank Rate then we would have expected a higher CPI projection."
"A high degree of uncertainty surrounds the timing of the first hike but we feel marginally more confident about our forecast for the first Bank Rate rise to come in February 2015 than we had done prior to the August Report."