by Damian -
Yesterday evening Bank of England policy maker Martin Weale said weak productivity growth may mean higher interest rates are needed in the short term to prevent demand putting a squeeze on the economy and boosting inflationary pressures.
Persistently slower productivity growth would have two implications for interest rates, Weale said in London yesterday. In the short term, interest rates would need to be higher in order to prevent demand running ahead of supply. But over the medium term, interest rates may remain lower than they were before the crisis, reflecting weaker underlying growth.
The focus for the UK today turns to the industrial production data for October. Markets are expecting both the manufacturing and Industrial production figures for October to post above consensus rises of 0.4%.
It is a fairly quiet day for the euro with the only data already released this morning being the trade balance figures. Later this morning the ECB’s Makuch will hold a press conference at 11.00 GMT in Bratislava.