UK MPC Preview August 2004

03 August 2004

UK MPC - expect another 25 bp tightening move from MPC on August 5th…..but 2005 outlook for interest rates more favourable
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SummaryWithout more evidence of wider inflation pressures, the MPC can thus be expected to favour a gradualist policy path with 25 bp tightening moves over the remaining months of 2004. Aside from house prices, neither sterling’s exchange rate index nor other UK asset prices suggest monetary policy is excessively loose and nor does the sterling yield curve.

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