• 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.

Source: Forex Live