Howard Archer Interest Quotations

Year-on-year growth of 2.2-percent exactly matched the Bank of England's forecast... reinforcing expectations that interest rates are set to remain unchanged for several more months to come.

The minutes pour more cold water over the prospects for a near-term interest rate cut.

If house prices start to accelerate markedly, we believe buyer interest will diminish, thereby keeping a lid on prices.

Robust service sector activity in February makes it even more of a cast-iron certainty that the Bank of England will keep interest rates unchanged next Thursday.

For now at least, the Bank of England will be very wary that a trimming of interest rates could excessively stimulate the housing market and risk sending house prices markedly higher. It certainly further rules out a move today.

Nevertheless, limited core inflation in January will not deter the ECB from hiking interest rates by a further 25 basis points on Thursday.

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.

This significantly reduces the prospects of any interest cut until at least August. Indeed, it increases the odds that the eventual next move in interest rates could be up.

This very much keeps the door open for an interest rate cut in February.

This underpins our belief that the Bank of England is too optimistic on the growth outlook and will eventually end up trimming interest rates by a further 25 basis points.

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.

December survey evidence showing robust service sector activity, stronger retail sales and firmer house prices has temporarily at least alleviated some concern over the economy's softness and eased pressure on the MPC for an imminent cut in interest rates.

We believe the door is opening for an interest rate cut early in 2006 if the economy fails to show sustained significant signs of improvement over the next couple of months.

With consumer price inflation below the 2% target level in both December and January and clearly below the levels forecast by the Bank of England in their November quarterly inflation report, a near-term interest rate cut suddenly looks a very real possibility again.

With one member of the MPC voting for an interest rate cut in December and Bank of England chief economist, Charlie Bean, recently making some dovish comments, the odds of an interest rate cut early in 2006 are rising.

Activity is benefiting from August's interest rate cut, increasing confidence in the housing market and still rising employment. This is likely to put a floor under house prices.

The evidence of marked improvement in the manufacturing sector further guarantees there will be no interest rate cut this Thursday. Indeed, we admit it is looking increasingly questionable whether interest rates will be trimmed further.

The testimonies to the Treasury Select Committee reinforce the impression that interest rates are set to remain on hold for several months to come.

It currently seems a pretty safe bet that interest rates will not change for several more months to come, if at all this year.

It seems a nailed-on certainty that the Bank of England will hold interest rates steady on Thursday,

This is still a pretty healthy report overall that suggests that the service sector has started 2006 relatively strongly. The report does little to change perceptions that the Bank of England will keep interest rates unchanged next week, and very probably for some time to come after then.

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.

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.

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.

This subdued growth is expected to help to contain underlying inflationary pressures and risks, underpinning our belief that interest rates will be cut by a further 25 basis points in February or March.

This is likely to reinforce the central bank's concern that any further trimming of interest rates could excessively stimulate the housing market and risk send housing prices markedly higher.

This is likely to put a floor under house prices, but we remain highly doubtful that house prices will move substantially higher on a sustained basis any time soon. If house prices start to accelerate markedly, we believe buyer interest will soon diminish, thereby keeping a lid on prices.

We believe that interest rates will eventually come down by a further 25 basis points to 4.25%.

We still believe UK interest rates will eventually be trimmed by a further 25 basis points, although not until August at the earliest.

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.

The slowdown in euro zone growth will not deter the ECB from raising interest rates in March and a further hike remains very likely in June.

The disappointing decline in manufacturing output is most unlikely to sway the Bank of England from leaving interest rates unchanged on Thursday.