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People Talk

People Talk

Good morning. We’ve seen a couple of high profile members of the ECB and Fed be a bit more candid than normal over the last 24 hours, giving us an insight into what we may expect to happen in the next few months. The topics have remained the same, with the ECB representative talking about Quantitative Easing and the Fed member talking about when the next interest rate hike will be.

ECB Member Jozef Makuch commented on how the Eurozone was ready for QE as other measures have not been successful. He expects low inflation to remain and swatted away concerns over Grexit with the theory that the Eurozone has added members as it has gone along and so could easily lose members, especially those who don’t observe the rules.

In the US, Atlanta Fed Chief Dennis Lockhart announced there would be a rate hike but not to get too worked up about when it would happen as it really doesn’t matter that much. The US economy is growing nicely, especially in comparison with the rest of the world but we should look out for some falling inflation figures over the next few months due to the falling oil prices and strong US Dollar. Once this has passed, expect a hike.

Oil prices are continuing to fall and soon we should see the benefits as petrol becomes available for less than £1 per litre. This is already the case at one garage in Birmingham. Although, according to Fox News this is unfortunately a no-go zone for the majority of the population…. Once this happens, then we should see consumer confidence and spending increase. This is on the back of poorer than expected UK retail sales for December as it looked like people did their Christmas shopping in November this year.

Main data out today is UK inflation.

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