Harvey Blackwood: Another Rate Hike on Horizon for UK

Harvey Blackwood: After raising interest rates for the first time in more than ten years last November, the BoE could hike again as soon as May.

After more than a decade without an increase in interest rates by the Bank of England, Harvey Blackwood economists believe another hike could happen in the next few months.

Economists at Shanghai, China-based Harvey Blackwood believe that the Bank of England’s Monetary Policy Committee will leave rates unchanged at 0.50 percent this week to give it the opportunity to evaluate the effect of last year’s rate increase on the British economy as the country nears Brexit.

However, the likelihood of another rate hike, as early as May this year, is increasing. Harvey Blackwood analysts have reported that many investors are of the opinion that rates could be increased more than once in 2018.

While Britain’s economy is falling well behind its peers in the global economic recovery, it has fared better than originally predicted at the time of the Brexit referendum when the UK voted to depart from the European Union.

Harvey Blackwood economists expect a fairly upbeat tone from the Monetary Policy Committee next week if they base their deliberations on recent economic data.

The Bank’s Governor, Mark Carney has been more optimistic recently, commenting on the upswing in salary growth and stating that the Bank of England’s agenda is now refocusing on dealing with elevated inflation.

Carney also stated that concerns over what Brexit will bring for the UK may be lessened as discussions go into full swing in the next few months.

While the US Federal Reserve has increased interest rates five times since the global financial crisis, and the BoE has only implemented one increase, the European Central Bank looks set to increase for the first time later this year.

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Source: Harvey Blackwood


Categories: Economy, Governmental Banking, Business

Tags: BoE, Brexit, Harvey Blackwood, HarveyBlackwood, interest rates

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