Howard Archer Quotations

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

Year-on-year growth of 2.2-percent exactly matched the Bank of England's forecast... reinforcing expectations that interest rates are set to remain unchanged for several more months to come.

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.

Mr Brown will clearly look to take advantage of the budget to further his credentials to take over as prime minister from Mr Blair.

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

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.

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

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 much of 2005.

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

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.

Going forward, UK exporters will be fervently hoping that recent signs of improving growth in Western Europe will be sustained and will increasingly feed through to boost exports,

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.

It appears that significant discounting is still needed to boost sales volumes.

Our Sunday lunches have been an excellent flagship because that is often many people's first experience of our menus.

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.

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.

Relatively subdued consumer spending, intense domestic and international competition, and high input costs continue to dampen ... the sector.

It currently seems a pretty safe bet that interest rates will not change for several more months to come, if at all this year.

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.

While the CBI survey indicated a marked softening in consumer spending following the relatively strong December performance, it nevertheless indicated a significantly stronger performance than that seen overall in recent months.

We believe the door is opening for an interest rate cut early in 2006 if the economy fails to show sustained significant signs of improvement over the next couple of months.

The overall trade performance was dragged down by a fifth successive deficit in oil trade and a reduced surplus in services.

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

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.

This subdued growth is expected to help to contain underlying inflationary pressures and risks, underpinning our belief that interest rates will be cut by a further 25 basis points in February or March.

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

This reinforces our belief that consumer spending will remain subdued for some time to come despite September's pick-up in retail sales.

With economic growth likely to remain below trend in the near term at least and unemployment set to continue rising, there is a very real danger that individual insolvencies and mortgage repossessions will climb markedly further over the coming months.

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 cut suddenly looks a very real possibility again.

While it is clearly premature to sound the all-clear on inflation, the October consumer prices data are largely reassuring for the Bank of England and boost hopes that inflation has peaked,

With one member of the MPC voting for an interest rate cut in December and Bank of England chief economist, Charlie Bean, recently making some dovish comments, the odds of an interest rate cut early in 2006 are rising.

While we believe that it is premature to rule out another 25-basis-point cut before the end of this year, we acknowledge that the odds are increasing that it will be delayed until early 2006.

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 is very possible in May.

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.

This very much keeps the door open for an interest rate cut in February.

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.

What happens after the October meeting is far from clear.

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.

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

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.

Flat export orders in February are particularly disappointing.

The sector may see modest expansion in the first quarter of 2006, having been a major drag on overall growth in the fourth quarter.

The strength of the public finances in January effectively guarantees that Brown will be able to avoid making any major tax hikes or significant spending cutbacks in March's budget.

The slowdown in euro zone growth will not deter the ECB from raising interest rates in March and a further hike remains very likely in June.

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

Pretty healthy retail sales growth in November reinforces belief that consumer spending is picking up to some extent, and reduces the case for a near-term interest rate cut.

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

The MPC could remain on the sidelines for some months to come as it monitors the strength of consumer spending and the housing market, and also looks to see if high oil and energy prices are feeding through to have second round inflationary effects.

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.

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 cut in interest rates.

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

This is still a pretty healthy report overall that suggests that the service sector has started 2006 relatively strongly. The report does little to change perceptions that the Bank of England will keep interest rates unchanged next week, and very probably for some time to come after then.

This is still a pretty benign report overall and broadly in line with Bank of England expectations contained in the February Inflation Report.

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 wage settlement levels early in 2006.

This confirms that late in 2005 there was still no evidence that pay was starting to be pushed up by recently higher consumer price inflation and increasing energy bills.

This increased housing market activity has clearly led to some recent firming in house prices, and there is undeniably a risk that prices could move sharply higher over the coming months.

There is undeniably a growing risk that house prices could move markedly higher over the coming months. Indeed, this risk is clearly showing more prominently on the Bank of England's radar.

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.

Consumer credit growth was again relatively muted in September, pointing to continuing consumer caution,

Consumer confidence is faltering anew, which does not bode well for spending in the near term at least.

Consumer confidence held up relatively well in February, following January's sharp bounce.

The minutes pour more cold water over the prospects for a near-term interest rate cut.

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 their higher input costs despite intense domestic and international competition and relatively soft demand.

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.

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.

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

The Nationwide data provides support for our long-held view that house prices will be unable to sustain sharp gains for some time to come.

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.

The February CBI survey reinforces our belief that consumer spending will be unable to sustain the relatively strong performance seen in the fourth quarter of 2005.

The consumer is the weak link in the European economic upturn story. We're past the worst, but it's hard to see a marked improvement in spending coming.

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

House prices are likely to remain relatively flat for an extended period,

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

Healthy mortgage lending data show that housing market activity extended its recent firmer performance in December. This is also borne out by the latest survey evidence consistently showing increased buyer interest.

For now at least, the Bank of England will be very wary that a trimming of interest rates could excessively stimulate the housing market and risk sending house prices markedly higher. It certainly further rules out a move today.

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

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 early in the New Year.

This is likely to reinforce the central bank's concern that any further trimming of interest rates could excessively stimulate the housing market and risk send housing prices markedly higher.

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 markedly, we believe buyer interest will soon diminish, thereby keeping a lid on prices.

The euro zone's upturn is still young and relatively fragile with significant question marks still hanging over the long-term strength of domestic demand.

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.

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.

The immediate impression is that the inflation report is pretty neutral, and it does little to encourage the view that the MPC could trim rates in the immediate future.

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 from 1.5% in June.

The GDP data (is) unlikely to be weak enough to prompt the MPC into cutting interest rates in November,

The earnings data may encourage the Bank of England to hold off from cutting interest rates in the immediate future as March while it seeks sustained clear evidence that the pay settlements for 2006 are remaining contained (the early signs are that wage moderation is continuing). However, we believe that interest rates are likely to be trimmed by a further 25 basis points by May.

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 have firmed to a limited degree recently amid stronger housing market activity and increased buyer interest.

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

The combination of rising unemployment, falling employment and muted earnings growth is hardly supportive for consumer spending. It reinforces our belief that overall growth will be softer than forecast by the Bank of England and that underlying inflationary pressures will remain muted.

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

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

The latest data - including the improvement in manufacturing activity and current strength of the housing market - has increased the odds that the eventual next move in interest rates will be up.

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 coming months.