We think that the deflation likely to be seen in the coming months will of the “good” sort, lasting only a short while and boosting households’ spending power. So we doubt that a rate cut – as floated by MPC member Andy Haldane – will be seen. That said, a rate rise seems unlikely until the Committee is sure that deflation is not becoming entrenched, which may take several months.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services