RBS's analyst Ross Walker supports the revision on "the weaker Q2 GDP outturn, the deteriorating domestic and global economic outlook, the more dovish underlying CPI projections in the BoE August Inflation Report and the continued absence of a decisive policy response to the euro area sovereign debt/banking sector crisis combine to tilt the UK monetary policy risks in favour of further loosening."
RBS believes that the "QE, alongside the ‘credit easing’ initiatives (FLS & ECTR), remains a much more likely policy course than Bank Rate cuts."
RBS also expects the unemployment rate advancing to 8.2% in 2012 from the 8.1% in 2011 and going further to 8.4% in 2013. CPI would decline to 2.6% the whole 2012 from 4.5% in 2011 according to the RBS' research and to ease to 1.5% in 2013.
The UK's National Statistics is scheduled Friday, Aug 24 at 8:30 GMT, to publish its Gross Domestic Product 2nd release report for the 2012 second quarter after posting a 0.8% declines in the Q2 first release.