Philip Shaw Couple Quotations

We are increasingly nervous about our call for a quarter-point rate cut in February, even if we are not ready to throw in the towel. Continued sluggish growth should mean the next couple of years see a degree of disinflation, justifying lower interest rates.

Both the input price and prices charged components are up on the month as well so this reduces the chance that rates will come down over the next couple of months.

The critical numbers will be the data on January which are due in a couple of months, but there are no signs of inflation-busting pay deals from these numbers and we expect that to remain the case.