Financial markets are betting this week that the Bank of England will not cut its key interest rates but leave them on hold at 4.75%. The market consensus from Trading Economics is that the 9-strong committee on Thursday, the 19th, will vote 8:1 to leave the UK Bank rate at 4.75%. That is despite annual …
Interest rates can be cut now
One of the oddities about the narrative on the direction of interest rates is the argument that, because consumer price inflation is still above the 2% target, the Bank of England cannot cut interest rates. That suggests that interest rate policy changes immediately impact the current inflation rate in the short term. However, this view …
Bank rate overkill? Could a 5% rise trigger recession?
As expected by current financial markets pricing, the Bank of England (BOE) raised interest rates to 5% in June, half a per cent up from the May level of 4.5%. The increase was not unanimous, just as the previous one was not, with two members voting to leave rates at 4.5%. Interestingly, the two members …
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