Business surveys are probably better guide to UK outlook than recent GDP data.
GDP is always a very lagging indicator.
Pattern from forward-looking surveys is not as strong for outlook as latest GDP.Official data showing negative productivity growth in the UK last year is a puzzle, as it is usually associated with severe recession.Still a very severe health warning on quality of official labour force survey data.How QT feeds along the yield curve is important.Long end of the yield curve is less important for monetary transmission than the short end.Large steepening of yield curve is not due to QT, but will need to consider how QT interacts with this.
When the yield curve steepens and goes positive, it’s generally a sign that monetary policy is not restrictive anymore.
This article was written by Giuseppe Dellamotta at www.forexlive.com.