UK economic data slew greets BOE officials debating rate cut

Bloomberg

Bank of England (BOE) policy makers considering whether the UK needs further stimulus will get a deluge of data in the coming week.
The economy is back under the microscope after outgoing Governor Mark Carney last week said officials are debating the merits of action and have plenty of room to act if necessary. A day later, Silvana Tenreyro said that she may support an interest-rate cut in the next few months if sluggish global growth and uncertainty surrounding Brexit persist.
So far both have voted with the majority of the nine-member MPC in favour of maintaining the benchmark at 0.75%, but their colleagues Michael Saunders and Jonathan Haskel have been calling for a reduction since November. Saunders will likely lay out his case when he makes his first speech since then on Wednesday in Bangor, Northern Ireland.
The BOE was one of the few major central banks that didn’t join the global monetary policy easing of 2019. Hemmed in by Brexit uncertainty, it held fire through the political battles and tense negotiations.
Though the UK finally agreed on an exit deal in late 2019, there’s still the huge hurdle of the future trading arrangements and a risk that the lack of clarity could continue to damp activity.
“The debate on the MPC around the need for stimulus is finely balanced. Tentative signs of a rebound in the data, lower uncertainty and the prospect of a big fiscal boost mean we think the committee will hold fire but the tolerance for downside surprises is clearly low,” Dan Hanson of Bloomberg Economics said.
So far, data has been mixed. Final purchasing managers indexes showed the dominant services sector strengthened at the end of the year following Boris Johnson’s decisive election victory, while the hiring and business sentiment climbed. Yet consumers, often the bellwether of the British economy, showed signs of losing momentum as retail sales posted their worst year on record and big chains reported an increasingly tough retail environment over the Christmas period.