Interest and exchange rate forecast

Interest and exchange rate forecast

That was the scene emanating from Central Banks in Frankfurt and London this week. Both the European Central Bank (ECB) and the Bank of England (BoE) kept monetary policy unchanged in their final meetings of the year. We expect a similar outcome next week when the US Federal Reserve meets.

Economic Analysis

06 December 2013

All is calm

But it hasn't always been calm this year. The ECB cut rates twice; the BoE introduced the UK to forward guidance; and there was plenty of speculation over when the Fed might begin to reduce its asset purchases. For 2014, central bankers will be hoping all is bright. Communication strategies are likely to feature heavily, particularly as the policy focus shifts slowly from highly accommodative towards normalisation. Getting this right won't be easy, and it won't just be about the Fed.

We would like to take this opportunity to thank those who took part in our survey last month. Your feedback is greatly appreciated and we are looking at how we can incorporate the ideas and suggestions into the Interest and Exchange Rate (IER) forecast for next year. As this is the last IER for 2013, RBS Group Economics would like to wish everyone a merry Christmas and a happy new year.

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