Ashton Whiteley - UK Domestic Income Growth Accelerates

Ashton Whiteley says upcoming minimum wage increase will help consumers cope with high cost of living but could give BoE more reason to hike interest rates.

UK household incomes are appreciating at close to their quickest rate since the worst of the financial crisis nine years ago and Ashton Whiteley analysts believe that this could increase the likelihood that the Bank of England will increase interest rates again soon.

Ashton Whiteley analysts say that an increase in the minimum wage that will be implemented soon was the most probable reason for the reports of increased household income from work, and that although higher wages would help with the rapidly rising cost of living facing consumers, it would also increase the odds of another interest rate hike this year.

Ashton Whiteley economists say that the BoE will probably not increase interest rates this week but might do so after its next meeting in May.

According to a survey by IHS Markit, approximately 57 percent of households anticipate that Bank of England will increase interest rates within the next six months. This prediction remained much the same as February’s forecast.

Ashton Whiteley analysts say that much is reliant on whether or not Prime Minister Theresa May can reach an agreement with the EU over a Brexit transition deal. With just over a year to go before Britain leaves the EU in March 2019, May is due to meet with EU leaders in Brussels next week to continue Brexit discussions.

In February, the Bank of England stated that it would more than likely need to increase interest rates sooner than it had initially anticipated. The BoE hiked interest rates for the first time in more than ten years in November last year.

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Source: Ashton Whiteley

Categories: Economy

Tags: Ashton Whiteley, AshtonWhiteley, BoE, employment, interest rates, wages

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