UK: Worrying data casts further doubt over BoE rate hikes - ING

According to James Smith, Developed Markets Economist at ING, today's disappointing UK consumer credit and manufacturing data takes a May rate hike even further off the table.

Key Quotes

“At 53.9, the UK manufacturing PMI is now the lowest it has been since late 2016 - and unlike a large chunk of recent UK data, we can't blame the weather can't really be blamed this time. With new orders reportedly growing more slowly, it's possible that the combination of a moderation in Eurozone activity and a slightly stronger pound are beginning to drag. At the margin, protectionist sentiment may have also played a role too.”

“As always, it's worth remembering manufacturing only makes up around 10% of the UK economy, so it will be Thursday's services PMI that will have a much greater bearing on Bank of England policy.”

“According to data released this morning, net consumer credit increased by just £0.3 billion in March, significantly below the usual growth of between £1.4-1.8bn. While there's every chance this is a blip, it does tally with the recent credit conditions survey from the BoE, which suggested credit availability has tightened significantly so far this year.”

“All of this means that a May rate hike from the Bank of England is now even further off the table.”