Rates seen on hold, the next step modest easing
The MPC has held its monetary policy rate at 12.00% since its bombshell in October. Our call is that, by tightening early and vigorously, the committee will contain core inflationary pressures. The next move in the policy rate is seen as gently downwards in H2 2012. If global headwinds were to deteriorate, it would accelerate its easing.
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