Flat export orders in February are particularly disappointing.

We still believe UK interest rates will eventually be trimmed by a further 25 basis points, although not until August at the earliest.

No change was no surprise, given recent overall evidence of modestly stronger economic activity and a more robust housing market.

The markedly reduced mortgage equity withdrawal since its fourth-quarter 2003 peak has undoubtedly weighed down significantly on consumer spending since mid-2004.

We believe that interest rates will eventually come down by a further 25 basis points to 4.25%.

There is a very real risk that consumer spending will be muted for an extended period without any other areas of the economy compensating significantly.

Euro region labor markets are finally beginning to see genuine, if somewhat limited, improvement, boosted by the pickup in growth since mid-2005. Rising employment is key to boosting consumer spending across the euro region.

The Bank of England currently seems unlikely to act before August given that growth in the first quarter appears to have been around trend, while survey evidence indicates that inflationary expectations have risen recently.

Activity is benefiting from August’s interest rate cut, increasing confidence in the housing market and still rising employment. This is likely to put a floor under house prices.

The data were firmer overall than expected,

Future growth still depends critically on developments in consumer spending, and we suspect that this will be relatively muted over the coming months.

The limited correction in the Halifax house price index in January following the marked rises during the latter months of 2005 reinforces our strong doubts that house prices will see sustained sharp rises over the...

It appears that strong competitive pressures on the high street and through the supply chain are continuing to contain any second round inflationary effects of high oil and energy prices.

The underlying picture that seems to be emerging is that consumer spending will be reasonably healthy over the Christmas period. If borne out by hard data, this dilutes the case for an interest rate cut...

If house prices start to accelerate markedly, we believe buyer interest will diminish, thereby keeping a lid on prices.

What happens after the October meeting is far from clear.

We suspect economic activity over much of 2006 will be held back by sluggish consumer spending and that the Bank of England’s growth forecast will prove to be too optimistic.

December survey evidence showing robust service sector activity, stronger retail sales and firmer house prices has temporarily at least alleviated some concern over the economy’s softness and eased pressure on the MPC for an imminent...

Overall, the mortgage approvals and lending data indicate that the more robust housing market activity evident in the second half of 2005 has continued into 2006.

The fall in headline annual producer output price inflation in March was primarily due to base effects reflecting the particularly sharp rise in producer prices a year ago as oil prices surged.

We believe house price increases will be relatively muted over the coming months, given affordability constraints, increased debt levels and muted earnings growth.

The MPC still has to see conclusive sustained evidence that 2006 pay settlements are remaining contained.

This is likely to put a floor under house prices, but we remain highly doubtful that house prices will move substantially higher on a sustained basis any time soon. If house prices start to accelerate...

The Bank of England will be pleased to see that producer output prices remained largely contained in December, but less good news is the further sharp increase in input prices as gas prices soared.

In economic terms at least, Wednesday’s budget seems set to be a very low key affair.

While the February mortgage lending and approval data are relatively healthy, there are hints that housing market activity could be starting to lose momentum after several months of improvement.

The climb in annual house price inflation to 2.5 per cent in November from a nine-year low of 1.8 per cent in October reported by the ODPM adds to the recent evidence that house prices...

Nevertheless, limited core inflation in January will not deter the ECB from hiking interest rates by a further 25 basis points on Thursday.

Below the headline data there are some positive features that should not be overlooked.

With consumer price inflation below the 2% target level in both December and January and clearly below the levels forecast by the Bank of England in their November quarterly inflation report, a near-term interest rate...

It seems a nailed-on certainty that the Bank of England will hold interest rates steady on Thursday,

Robust service sector activity in February makes it even more of a cast-iron certainty that the Bank of England will keep interest rates unchanged next Thursday.

The Bank of England will not be happy to see that manufacturers output prices rose at an increased rate in December, as it suggests that they could be stepping up their efforts to pass on...

The disappointing decline in manufacturing output is most unlikely to sway the Bank of England from leaving interest rates unchanged on Thursday.

The testimonies to the Treasury Select Committee reinforce the impression that interest rates are set to remain on hold for several months to come.

Manufacturers will be hoping that healthier growth in the euro zone and a recently softer pound will increasingly feed through to give them with a significant boost in 2006.

This underpins our belief that the Bank of England is too optimistic on the growth outlook and will eventually end up trimming interest rates by a further 25 basis points.

UK imports of goods excluding oil … rose for a fourth successive month in February, and by substantial 4.5 percent, suggesting that domestic demand may have surprised on the upside in the first quarter.

Following the higher-than-expected headline producer price inflation data for January… (Tuesday’s data) is welcome reassurance that strong competitive pressures through the supply chain are still limiting the pass-through effects of high oil and energy prices.

The increase in inflation in August was primarily due to higher prices for fuel and some food items, while core consumer inflation actually edged back down to 1.7% after spiking up to 1.8% in July...

If this is confirmed, it will reinforce our suspicion that the December performance was inflated by many consumers opening their wallets to treat their families and themselves at Christmas having held back their spending over...

The clear improvement in economic sentiment in December boosts hopes that domestic demand will increasingly kick in over the coming months to support growth.

All the indications are that the ECB remains inclined to tighten monetary policy further over the coming months to contain inflationary risks.

This significantly reduces the prospects of any interest cut until at least August. Indeed, it increases the odds that the eventual next move in interest rates could be up.

This [CPI data] very much keeps the door open for an interest rate cut in February, although the Bank of England may still prefer to wait while it monitors the strength of consumer spending and...

The evidence of marked improvement in the manufacturing sector further guarantees there will be no interest rate cut this Thursday. Indeed, we admit it is looking increasingly questionable whether interest rates will be trimmed further.

Retail sales picked up more than expected in March, which along with the current strength in the housing market, boosts hopes that the consumer is still alive, if not exactly kicking.

This is a really stunning retreat in retail sales. It reinforces our belief that the Bank of England is too optimistic about consumer spending.

While the fourth quarter GDP data and the relatively healthy mix of the components further diminishes the chances of a near-term trimming of interest rates, we still believe a 25 basis point interest rate cut...

The immediate impression is that the inflation report is pretty neutral. It does little to encourage the view that the bank could trim rates in the immediate future.