When will UK base rates start to rise?
UK base rates have remained at 0.5% for some months now as the UK government looks to shore up the UK economy and try to inject more economic activity across the board. However, despite the fact that base rates have remained historically low for some time now there is still a need for significant improvement in liquidity levels in the commercial money market.
Not only are we seeing businesses struggling with their cash flow and investment capital, but UK consumers are also struggling to refinance their credit card debts and mortgage liabilities. The UK government is doing as much as it can at the moment, having injected significant amounts of money into the banking system and encouraged the Bank of England to retain base rates at historically low levels. So what next?
If you think of the UK economy as a large ship, it will take some time for this to turn around and while the UK government has injected capital into the economy the recovery will not happen overnight. It will likely be a gradual build-up of steam in the UK economy which will then see a rise in economic activity, economic confidence and ultimately consumer spending. Whether this will happen next week, next month or next year remains to be seen but at some point the billions upon billions of pounds invested by the UK government will make a difference.
Share this..
Related stories
Thomas Cook is the centre of attention
Tour giant Thomas Cook will this week be the centre of attention after UK research outfit Morgan Stanley sounded the alarm bells over the company's increased debt. Citing adverse currency movements, higher than expected exceptional costs, a weakness in working capital and a significant expansion programme over the last few years, the broker believes that the company may find it difficult to refina...
Read MoreLloyds bank under fire after Panorama revelations
At a time when Lloyds bank needs to keep its nose as clean as possible a number of revelations have been revealed after a BBC Panorama programme delved into the company's Jersey operation. It is alleged that the BBC programme filmed one particular Lloyd's employee in Jersey who explained to a customer how they could channel their savings income via Hong Kong to avoid the European Savings Tax Direc...
Read MoreManufacturing output figures cast doubt on UK recovery
Yet again figures from the Office for National Statistics have added further confusion for those who had hoped the UK recession had bottomed out. Manufacturing output for the three months to May was down 1.2% which was a further fall on the previous quarter which had shown a fall of 0.6%. As a consequence, the National Institute of Economic and Social Research has been forced to revise its earlier...
Read MoreDebt management third parties could be regulated in the future
The UK government has now clicked onto the fact that an increase in third-party debt management companies from 40 in 1999 to 150 today has revealed something of a gap in the regulatory system. Currently debt management companies are able to negotiate with borrowers on behalf of their customers, in exchange for a fee, looking to consolidate loans and stretch their payment periods over a longer dist...
Read MoreWhen will consumers start to spend again?
Despite the fact there are sporadic signs that the UK economy is improving and may well have bottomed out there is a feeling that UK consumers are retaining cash in their pockets rather than spending on the high street. If this is happening, how and when will UK consumers start to part with their money again?
The problem for many UK consumers is the fact that job security has disapp...