Howard Archer Data Quotations

Overall, the mortgage approvals and lending data indicate that the more robust housing market activity evident in the second half of 2005 has continued into 2006.

While it is clearly premature to sound the all-clear on inflation, the October consumer prices data are largely reassuring for the Bank of England and boost hopes that inflation has peaked,

While the fourth quarter GDP data and the relatively healthy mix of the components further diminishes the chances of a near-term trimming of interest rates, we still believe a 25 basis point interest rate cut is very possible in May.

While the February mortgage lending and approval data are relatively healthy, there are hints that housing market activity could be starting to lose momentum after several months of improvement.

Below the headline data there are some positive features that should not be overlooked.

Following the higher-than-expected headline producer price inflation data for January... (Tuesday's data) is welcome reassurance that strong competitive pressures through the supply chain are still limiting the pass-through effects of high oil and energy prices.

The Nationwide data provides support for our long-held view that house prices will be unable to sustain sharp gains for some time to come.

Healthy mortgage lending data show that housing market activity extended its recent firmer performance in December. This is also borne out by the latest survey evidence consistently showing increased buyer interest.

The GDP data (is) unlikely to be weak enough to prompt the MPC into cutting interest rates in November,

The earnings data may encourage the Bank of England to hold off from cutting interest rates in the immediate future as March while it seeks sustained clear evidence that the pay settlements for 2006 are remaining contained (the early signs are that wage moderation is continuing). However, we believe that interest rates are likely to be trimmed by a further 25 basis points by May.

The latest data - including the improvement in manufacturing activity and current strength of the housing market - has increased the odds that the eventual next move in interest rates will be up.