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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (42397)	12/8/2005 9:52:58 AM
From: mishedlo	Respond to of 116555

OUTLOOK BoE poised to keep key repo rate unchanged at 4.50 pct today Thursday, December 8, 2005 6:15:22 AM afxpress.com LONDON (AFX) - The Bank of England is poised to keep borrowing costs unchanged when it concludes its rate-setting meeting today as worries over above-target inflation offset concerns over the level of economic growth All 30 forecasters polled by AFX News expect the nine-member Monetary Policy Committee to leave the key repo rate at 4.50 pct for the next couple of months as it monitors the labour market closely during the current wage round Analysts said the MPC will not contemplate cutting its key repo rate from the current 4.50 pct until February at the earliest when all the evidence from the January pay round should be in, even if retailers suffer a disappointing Christmas, as predicted by the Confederation of British Industry Partly because of this concern over wages, the MPC kept rates unchanged in November and did not discuss the need for a rate cut In its Inflation Report, the BoE predicted that CPI inflation would be close to the 2.0 pct target two years or so ahead, but the forecast assumed there were no second-round effects on pay from oil prices. So far, the MPC members conceded that there have not been any second-round effects but have ratcheted up their concerns over recent days and weeks The MPC gets particularly concerned about the inflation impact of wage growth when average earnings are rising by 4.5 pct or more Though there is unanimity about the outlook for borrowing costs this month and next, the forecasting community is divided about what the MPC will do next year, though there is a clear majority predicting lower borrowing costs over the next 12 months Most think that interest rates have further to fall, possibly down to as low as 3.50 pct, as economic growth continues to come in below trend and inflationary pressures ease in the wake of subdued activity levels and a sustained decline in oil prices Alan Castle, UK economist at Lehman Brothers, reckons the MPC will be spurred into action as the consumer slowdown gathers pace and wage increases remain benign In addition, he is factoring some 6 bln stg of tax increases on the consumer sector in the spring budget, as Chancellor of the Exchequer Gordon Brown seeks to sort out the fiscal position before he becomes, as most people expect, the next Prime Minister some time in 2007/8. Other economists though think the central bank will tweak up interest rates over the coming year, but not by much, as economic growth comes back towards the trend rate, thought to be around 2.50 pct a year. Malcolm Barr, economist at JP Morgan, is one who expects growth to move back towards trend "The MPC will want to nudge rates back up towards what it thinks is the neutral level (above 4.50 pct)," he said FORECASTER DECEMBER END-2006 4CAST 4.50 4.50 ABN Amro 4.50 4.50 Bank of America 4.50 4.00 Bank of New York 4.50 4.25 Barclays Capital 4.50 4.75 Bear Stearns 4.50 4.00 BNP Paribas 4.50 4.75 Capital Economics 4.50 3.50 CEBR 4.50 4.25 CIBC World Markets 4.50 4.00 Citigroup 4.50 4.00 Commerzbank Securities 4.50 4.50 CSFB 4.50 4.50 Daiwa Securities 4.50 4.25 Deutsche Bank 4.50 4.00 Dresdner Kleinwort Wasserstein 4.50 4.25 ECU Group 4.50 4.75 Global Insight 4.50 4.25 HBOS 4.50 4.50 HSBC 4.50 3.50 ING Barings 4.50 4.00 Investec 4.50 4.00 JP Morgan 4.50 4.75 Lehman Brothers 4.50 3.50 Lloyds TSB 4.50 4.75 Merrill Lynch 4.50 3.75 Monument Securities 4.50 4.25 Royal Bank of Scotland 4.50 4.25 Schroders 4.50 3.50 UBS 4.50 4.75

To: Knighty Tin who wrote (42397)	12/8/2005 10:00:33 AM
From: mishedlo	Respond to of 116555

Jobless claims up unexpectedly in latest week Thursday, December 8, 2005 1:46:38 PM afxpress.com WASHINGTON (AFX) - First-time filings for state unemployment benefits rose 6,000 to 327,000 in the week ended Dec. 3, the Labor Department said Thursday. It's the highest level of claims since the week ended Nov. 19. A Labor Department official said 7,000 claims in the latest week were related to Hurricanes Katrina and Rita, bringing the total number of claims filed because of the two hurricanes to 569,000 The official said it is unusual for claims to continue to be filed so long after the hurricanes struck the Gulf Coast in late August and September Hurricane Wilma has had a smaller impact on the labor market, with only 700 claims filed in the latest week, bringing the total to 30,700 The increase in jobless claims in the latest week was unexpected. The consensus forecast of Wall Street economists was for claims to inch lower by 2,000 to 318,000. Claims in the previous week were revised to a decrease of 16,000 to 321,000 compared with the initial estimate of a fall of 17,000 to 320,000. The four-week average of initial claims fell 250 to 322,500. Meanwhile, the number of Americans receiving state jobless benefits fell 137,000 to 2.60 million in the week ending Nov. 26. This is the lowest level since the week ended Sept. 3. The four-week moving average of continuing claims fell 46,750 to 2.73 million, the lowest since Sept. 24 The insured unemployment rate - the proportion of eligible workers who are receiving benefits - fell to 2.0% in the week ended Nov. 26 from 2.1% in the previous week. It is the lowest rate since early September [exactly how do they know these are hurricane related? Mish]

To: Knighty Tin who wrote (42397)	12/8/2005 10:12:49 AM
From: mishedlo	Respond to of 116555

some interesting housing charts investech.com

To: Knighty Tin who wrote (42397)	12/8/2005 10:14:28 AM
From: mishedlo	Read Replies (2) \| Respond to of 116555

BoE must monitor consumer spending after leaving rates on hold today - CBI Thursday, December 8, 2005 12:27:59 PM afxpress.com LONDON (AFX) - The Bank of England's decision to leave interest rates on hold today is "understandable", but the bank must monitor developments in consumer spending closely, a leading business lobby said "The Bank has again opted to maintain a steady course, which is understandable given the mixed signals about the economy's immediate prospects and the importance of holding down inflation expectations ahead of the New Year wage round," the Confederation of British Industry's chief economic adviser Ian McCafferty said However, the CBI's forecasts show that consumer spending will continue to be constrained by high energy costs and an unwillingness to borrow given high personal debt levels, leaving the economy growing only modestly into next year, he said "The Monetary Policy Committee must therefore be on guard against further economic weakness, and be ready to cut rates in the New Year, unless wage rises or other inflationary pressures provide a good reason not to." The BoE reduced the benchmark repo rate by a quarter point to 4.50 pct in August, where it has been stuck ever since