BoE interest rate decision comment: “…we believe a period of interest rate hikes lies ahead for the UK.”

by | May 10, 2018

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Alex Brandreth, Deputy CIO at Brown Shipley, said: “While interest rates remain unchanged, it does look like policy direction is going to change in the near future and we believe a period of interest rate hikes lies ahead for the UK. The current backdrop of global growth is the most synchronised it has been for almost ten years and the subsequent spill over from this will inevitably affect the UK economy.

“Those looking for interest rate movements should point their gaze to August and November as these meetings are accompanied by the quarterly inflation report. November seems a particularly sensible month to move as we’ll have found out the decision on the UK’s divorce settlement from the European Union by October and the Bank can make any decisions with this in mind.

“Six years into the current economic cycle, we are arguably closer to the end than the beginning and when the eventual slowdown does come it is important that the Bank of England has sufficient room to cut interest rates in order to stimulate the economy. With rates still rooted at emergency levels, this is one of the challenges faced by the Bank and how it chooses to deal with this will be key to the success of the UK economy in coming years.”

 

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