UK interest rates and the shadow of BREXIT
Ineterest Rate Rises in February>
As the UK’s departure from the EU grows ever nearer, experts are predicting that the Bank of England is considering raising interest rates before Spring.
Policymakers may adopt a ‘wait-and-see’ attitude. Once the terms of the revised deal become apparent (or even a no deal), and a picture emerges of what a post-Brexit economy might look like, they will no doubt take stock and consider how best to steer the economy through the transition phase.
Some market-watchers believe that May looks like the first available opportunity to raise rates to 1%, and even then, this will depend on key economic data such as inflation and unemployment figures.
Contrary news flow predicts a February rise, based on stronger than expected economic growth. Data from the International Monetary Fund shows the UK economy is currently performing at above its long-term average growth potential.
Although the continuing low level of interest rates is not good news for savers, mortgage holders and those hoping to get on the housing ladder look set to benefit for the early part of the year.
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