A quick scan of the headlines does not show anything on expanding quantitative ease in King’s speech in Edinburgh. He says the UK is likely to return to growth in the second half of 2009. Output is well below year ago levels and unemployment is well above. It is likely to stay that way for some time, he says. CPI will be volatile but will rise in coming months. The future outlook is hard to judge given the impairment of the banks and fiscal tightening.
Cable is choppy, now at 1.6355. The lack of quantitative ease talk is likely to be seen as a positive, even if his outlook is not particularly rosy. 1.6375/80 is resistance on rallies.
