Howard Archer Likely Quotations

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.

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.

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.

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

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 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.