Howard Archer Pending Quotations

Euro region labor markets are finally beginning to see genuine, if somewhat limited, improvement, boosted by the pickup in growth since mid-2005. Rising employment is key to boosting consumer spending across the euro region.

There is a very real risk that consumer spending will be muted for an extended period without any other areas of the economy compensating significantly.

If this is confirmed, it will reinforce our suspicion that the December performance was inflated by many consumers opening their wallets to treat their families and themselves at Christmas having held back their spending over much of 2005.

Pretty healthy retail sales growth in November reinforces belief that consumer spending is picking up to some extent, and reduces the case for a near-term interest rate cut.

The markedly reduced mortgage equity withdrawal since its fourth-quarter 2003 peak has undoubtedly weighed down significantly on consumer spending since mid-2004.

The strength of the public finances in January effectively guarantees that Brown will be able to avoid making any major tax hikes or significant spending cutbacks in March's budget.

We suspect economic activity over much of 2006 will be held back by sluggish consumer spending and that the Bank of England's growth forecast will prove to be too optimistic.

The MPC could remain on the sidelines for some months to come as it monitors the strength of consumer spending and the housing market, and also looks to see if high oil and energy prices are feeding through to have second round inflationary effects.

Consumer confidence is faltering anew, which does not bode well for spending in the near term at least.

While the CBI survey indicated a marked softening in consumer spending following the relatively strong December performance, it nevertheless indicated a significantly stronger performance than that seen overall in recent months.

The underlying picture that seems to be emerging is that consumer spending will be reasonably healthy over the Christmas period. If borne out by hard data, this dilutes the case for an interest rate cut early in the New Year.

This (CPI data) very much keeps the door open for an interest rate cut in February, although the Bank of England may still prefer to wait while it monitors the strength of consumer spending and wage settlement levels early in 2006.

The February CBI survey reinforces our belief that consumer spending will be unable to sustain the relatively strong performance seen in the fourth quarter of 2005.

The consumer is the weak link in the European economic upturn story. We're past the worst, but it's hard to see a marked improvement in spending coming.

This reinforces our belief that consumer spending will remain subdued for some time to come despite September's pick-up in retail sales.