In the US this morning, markets are waiting to hear from Alan Greenspan, who will testify before Congress today and tomorrow. On the other side of the pond, however, today was February Inflation Report day at the Bank of England. Here is their summary:
Since the November Report, the global economic recovery has continued, though the pace of expansion has slackened. In the United Kingdom, output growth was around trend... Labour cost pressures remained muted, but input and import prices picked up and CPI inflation rose to 1.6%. In the Committee’s central projection, four-quarter GDP growth remains robust and close to trend over the forecast period, while inflation rises gradually, passing through the 2% target during the second year. The balance of risks, both to growth and inflation, is to the downside.
The Bank expresses its outlook in the form of so-called "fan charts." Here's the description of the inflation chart...
The fan charts depict the probability of various outcomes for CPI inflation in the future. If economic circumstances identical to today’s were to prevail on 100 occasions, the MPC’s best collective judgement is that inflation over the subsequent three years would lie within the darkest central band on only 10 of those occasions. The fan charts are constructed so that outturns of inflation are also expected to lie within each pair of the lighter red areas on 10 occasions. Consequently, inflation is expected to lie somewhere within the entire fan charts on 90 out of 100 occasions.
... and here is the inflation chart...
... and the comparable chart for GDP growth.
According to the Financial Times, this outlook means a "further weakening market expectations of interest rate cuts this year."