Weekly Economic Briefings - Uk Weekly Economic Briefing
It has been another dire week in global financial markets, which are now pricing a greater than 50% chance of a UK rate cut in 2016. Though this week’s UK releases were weak, they related to only a small section of the economy and a broader sweep offers little justification for the recent extreme market moves. But there is an increasing risk that investor nervousness will be transmitted to consumers and businesses. Against this backdrop, it was perhaps surprising that Sir Jon Cunliffe’s latest speech ignored the monetary policy outlook and focused on financial stability issues. In suggesting that intervention could be necessary if credit were to grow faster than GDP, he appeared to set the bar fairly low and FPC action in 2016 is looking increasingly likely.