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Realistbear

Experts: Q4 Was A Blip--Strong Recovery Underway

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http://www.telegraph.co.uk/finance/economics/8300583/UK-services-bounce-back-reaction.html

UK services bounce back: reaction
Britain's services sector expanded at its fastest pace in eight months last month as business bounced back from the snow, despite a record jump in input cost inflation. This is what economists make of the January Markit/CIPS services PMI survey.
11:39AM GMT 03 Feb 2011
2 Comments
Jeremy Cook, World First
“While it is early days yet it seems the fears for the UK were overdone and a double dip recession is looking increasingly unlikely.
“There is no doubt that the weather played its part in December’s poor showing, and once the thaw hit it revealed some strong fundamentals. The Coalition will be breathing a sigh of relief this morning.”
Alan Clarke, BNP Paribas
"What this reading is telling us is that the Q4 weakness was temporary and that Q1 will be much stronger. It's a tricky decision for the Bank of England on rates. Their Inflation Report will be being finalised.
Peter Dixon, Commerzbank
"It does indicate, together with the strong manufacturing number, that January activity levels look solid and it will remove some of the gloom around the Q4 GDP numbers."
"As far as the Bank of England is concerned, if the economy is back on a decent growth path it does indicate that the pressure for an earlier rate hike than we're currently expecting will rise. But I don't think they'll do anything until we have a first reading of Q1 GDP, which will take them until the May Monetary Policy Committee (MPC) meeting."
Vicky Redwood, Capital Economics
"January's UK CIPS/Markit report on services suggests that the economy has bounced back from December's snow-related dip, but an underlying slowdown still seems to be underway."
"Accordingly, we would hesitate at this stage to say that the recovery is back on track. With so much uncertainty about the underlying pace of growth, we still doubt that the MPC will want to risk tightening policy prematurely.
"Accordingly, a rate rise next week continues to look pretty unlikely. Indeed, if we're right in expecting the recovery to continue to struggle, rates are unlikely to rise at all this year."
Ross Walker, RBS
"All of this leaves the BoE Bank Rate decision in February delicately poised. Our view is that the MPC will probably refrain from hiking next week - citing the weak Q4 GDP print and preferring to observe the extent to which these key surveys can sustain their January levels.
"It is one thing for the surveys to rebound, another to maintain those levels - rather like the cliché about football teams finding it much harder to retain the league title than to win it in the first place.
"From a market perspective, the bigger risk - assuming the MPC does not hike in February - may be that policy will be left on hold until the next Inflation report in May. The risks are clearly skewed towards an earlier move."
David Kern, British Chambers of Commerce
“These figures were stronger than expected and confirm our assessment that the UK economy will continue to recover. They also support our view that the negative impact of the severe weather on the Q4 2010 figures is even larger than the ONS has initially estimated.
"The rebound in the service sector over the next quarter could also be relatively strong, despite the impact of the VAT increase.
“We are concerned that recent positive figures could heighten pressure on the MPC to raise interest rates too early. The UK recovery is still fragile and the more forceful implementation of the Government’s austerity plan will inevitably have negative effects on business cashflows and consumer disposable incomes."

IMO they are a bounce (if they are even true) after a dismal Q4--but the trend will continue lower as the economy begins to reflect lower employment, higher prices, crashing deman for goods and services despite the January bounce, and the reality that house prices will have to crash as a resulot of all of the aforementioned. Austerity has yet to bite but is underway, at least for those of us, "in it together."

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http://www.telegraph.co.uk/finance/economics/8300583/UK-services-bounce-back-reaction.html

UK services bounce back: reaction
Britain's services sector expanded at its fastest pace in eight months last month as business bounced back from the snow, despite a record jump in input cost inflation. This is what economists make of the January Markit/CIPS services PMI survey.
11:39AM GMT 03 Feb 2011
2 Comments
Jeremy Cook, World First
“While it is early days yet it seems the fears for the UK were overdone and a double dip recession is looking increasingly unlikely.
“There is no doubt that the weather played its part in December’s poor showing, and once the thaw hit it revealed some strong fundamentals. The Coalition will be breathing a sigh of relief this morning.”
Alan Clarke, BNP Paribas
"What this reading is telling us is that the Q4 weakness was temporary and that Q1 will be much stronger. It's a tricky decision for the Bank of England on rates. Their Inflation Report will be being finalised.
Peter Dixon, Commerzbank
"It does indicate, together with the strong manufacturing number, that January activity levels look solid and it will remove some of the gloom around the Q4 GDP numbers."
"As far as the Bank of England is concerned, if the economy is back on a decent growth path it does indicate that the pressure for an earlier rate hike than we're currently expecting will rise. But I don't think they'll do anything until we have a first reading of Q1 GDP, which will take them until the May Monetary Policy Committee (MPC) meeting."
Vicky Redwood, Capital Economics
"January's UK CIPS/Markit report on services suggests that the economy has bounced back from December's snow-related dip, but an underlying slowdown still seems to be underway."
"Accordingly, we would hesitate at this stage to say that the recovery is back on track. With so much uncertainty about the underlying pace of growth, we still doubt that the MPC will want to risk tightening policy prematurely.
"Accordingly, a rate rise next week continues to look pretty unlikely. Indeed, if we're right in expecting the recovery to continue to struggle, rates are unlikely to rise at all this year."
Ross Walker, RBS
"All of this leaves the BoE Bank Rate decision in February delicately poised. Our view is that the MPC will probably refrain from hiking next week - citing the weak Q4 GDP print and preferring to observe the extent to which these key surveys can sustain their January levels.
"It is one thing for the surveys to rebound, another to maintain those levels - rather like the cliché about football teams finding it much harder to retain the league title than to win it in the first place.
"From a market perspective, the bigger risk - assuming the MPC does not hike in February - may be that policy will be left on hold until the next Inflation report in May. The risks are clearly skewed towards an earlier move."
David Kern, British Chambers of Commerce
“These figures were stronger than expected and confirm our assessment that the UK economy will continue to recover. They also support our view that the negative impact of the severe weather on the Q4 2010 figures is even larger than the ONS has initially estimated.
"The rebound in the service sector over the next quarter could also be relatively strong, despite the impact of the VAT increase.
“We are concerned that recent positive figures could heighten pressure on the MPC to raise interest rates too early. The UK recovery is still fragile and the more forceful implementation of the Government’s austerity plan will inevitably have negative effects on business cashflows and consumer disposable incomes."

IMO they are a bounce (if they are even true) after a dismal Q4--but the trend will continue lower as the economy begins to reflect lower employment, higher prices, crashing deman for goods and services despite the January bounce, and the reality that house prices will have to crash as a resulot of all of the aforementioned. Austerity has yet to bite but is underway, at least for those of us, "in it together."

Interest rate rises appear to be on the agenda again. As far as HPC is concerned, that is all that matters. Raise rates, bring the house of cards down.

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There are two more revisions to the -0.5% figure (anyone know when?). Is it beyond the realms of possibility that the final number will end up being flat?

They used to be about the 23rd of every month. I don't know if that's still the case,

Peter.

P.S. I believe that there are lots of revisions after the 3rd and "final" announcement as well, since it can take a long time to get all the data.

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There are two more revisions to the -0.5% figure (anyone know when?). Is it beyond the realms of possibility that the final number will end up being flat?

March is the final revision.

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all continues to point to nothing happening anytime soon with regard to interest rates.

I beg to differ. Double dip is the only excuse left. With a stronger than expected recovery it's up up up with the rates.

I prefer this option should crash house prices quicker than another recession.

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  • 311 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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