I don't think so. The data has been weaker than expected, but the BOE's forecasts were already fairly dovish.
Asks if BOE gets to 3% by year-end.
Host
Shonali Panini
We have two cuts for the rest of the year, to 3.25%. For me, 3.25% is the neutral rate. We need to see more weakness to justify cutting below that.
Asks about conviction on 2% inflation.
Host
Shonali Panini
There is a path to get to 2% by April due to base effects and budget disinflationary measures. Wage-setting data is coming close to levels consistent with the target.
Asks about political leadership challenge impact.
Host
Shonali Panini
Uncertainty around policy making impacts economic growth. We saw consumption weaken in Q4 due to tax uncertainty.
Asks about growth outlook and labor market risks.
Host
Shonali Panini
We forecast 1.2% growth. The biggest downside risk is the labor market deteriorating further. If unemployment reaches 5.5% by mid-year, I'd be worried.