BoE: Another sluggish quarter for growth casts doubt over a rate hike this year - ING
|"The latest growth data has dashed any hope that momentum would return after a particularly soft start to the year," explains James Knightley, Chief International Economist at ING.
Key quotes:
"Admittedly, the performance of the all-important service sector could have been worse: Warm weather and a late Easter helped retailers sell their summer wares. But this is likely to prove temporary and, as real wages continue to fall, the household spending squeeze will continue to intensify."
"It’s also worth remembering that today’s GDP estimate is composed of only 45% ‘hard’ data, with the rest generated by ONS statistical models. The relatively strong construction and service sector gains assumed for June means a downwards revision cannot be ruled out."
"But for the Bank of England outlook, what matters most is that growth in the first half of this year is markedly slower than the pace seen last year. With signs of domestic inflationary pressures still limited, we think it is unlikely that the Bank will hike rates this year."
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