FXStreet (Bali) - Despite the upbeat UK services PMI on Tuesday, RBS Economists believe that longer term, the economic 'moderation' theme remains intact.



Key Quotes



"The upside surprise in the UK services PMI temporarily calmed those worried about a slowdown in economic momentum. Industrial production for June may reverse after an unusually steep 0.7% m/m decline in May (RBSe 0.6%, market 0.6%)."



"Longer term, our economists feel the 'moderation' theme remains intact as the headwinds of interest rate rises, an appreciating currency and (from 2015) a significant and sustained fiscal tightening are expected to outweigh any favourable developments vis-à-vis stronger capex and net exports."



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