Kallum Pickering

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Last quote by Kallum Pickering

As our base case, we look for a 25 basis point first rate hike in the second quarter of 2018, with a 30% chance the BoE raises the bank rate earlier. After today's data release, risks to that call are skewed towards the BoE hiking sooner rather than later.
Mar 21 2017
We can learn a lot about a person if we know what types of things he or she talks about or comments on the most frequently. There are numerous topics with which Kallum Pickering is associated, including U.K. and EU. Most recently, Kallum Pickering has been quoted saying: “There is a clear case for tighter monetary policy in the UK. The economy is in its eighth year of expansion, unemployment is at a record low, and households are gearing up again.” in the article Interest rates stay on hold but rising inflation breaks the consensus at the Bank of England.
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Kallum Pickering quotes

It would be good for markets if Hammond would present specific short and medium term measures to offset he shocks of Brexit.

While prices for imported goods such as fuel and food will be affected the most, households are unlikely to cut back on their consumption as these are essential goods. Instead, the rise in costs for these goods will eat away at the remaining income that would normally finance discretionary purchases such as leisure, retail, hotels and the like.

In a world of sluggish nominal wage growth and low rates of return on savings, (rising inflation) is especially bad.

May and her cabinet had pursued Brexit under the assumption that the prime minister had the authority to trigger 'Article 50' under royal prerogative. Without such power it is unlikely that the government would be in a position to fully pursue a hard Brexit – one where the U.K. placed strong restrictions on flows of migrants from the EU and did not keep a high level of access to the EU single market.

(It) has the potential to materially change the calculus of Brexit.

We expect the BOE to use (Thursday's) November inflation report as an opportunity to take stock on the state of the economy and the effectiveness of its policies, while sending a strong signal that the BOE stands ready to do more if economic conditions were to deteriorate.

The BOE's decision to provide extra liquidity around the vote and then to announce a suitably large monetary stimulus in response to the sharp downgrades in the market's assessment of the U.K.'s economic outlook was appropriate. But the U.K.'s better-than-expected economic performance since the vote has removed the need for the BOE to act again.

We will be looking closely at the BOE's assessment of the forthcoming inflationary headwinds to consumption, the impact of 'hard Brexit' fears on investment, and, if any, the policy implications of the recent weakening of sterling.

I'm more interested in the second estimate in a couple of weeks' time. It will show how business and consumers reacted to the vote.

The bigger-than-expected drop in sterling has done a lot of the work for the Bank of England.

The uncertainty about the conditions under which U.K. based firms will access the EU market post-Brexit, especially relating to passporting, will weigh heavily on business sentiment.

If the BoE does too little, say, just a rate cut, that would be insufficient to have any meaningful positive effect on demand and risks causing a knee-jerk re-pricing in financial markets. If the BoE does too much, it could spook households and markets into thinking the economy is in worse shape than it is. Coming out too hot could be worse than coming out too cold.

We see a 60 percent chance that the nine-member MPC votes to cut the bank rate, if so, probably by 25bps.

There is a chance the MPC holds for now and instead opts to send a dovish signal that the bank will ease monetary policy three weeks later at the August Inflation Report.

This is the (BoE's) key concern when it comes to wages and inflation as this relationship can become self reinforcing -- lower earnings drive lower inflation and vice versa.

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