Howard Archer Contain Quotations

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.

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 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.

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

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.

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