Have UK Interest Rates Bottomed Out?
While just a few weeks ago the prospect of further reductions in UK interest rates seemed to be a certainty, things have really changed over the last couple of weeks. First we saw signs that inflation was making a comeback and set to creep past the 4% level and then we started to hear concerns from within the Bank of England with even the most optimistic of members admitting that interest rates could not move any lower at the moment.
However, this mood of disappointment has worsened over the last few days with some analysts even daring to suggest that interest rates will actually rise by the turn of this year. As the Bank of England forecast inflation to move to over 4% during the summer period, they have also indicated it is unlikely to move down towards the government target of 2% for at least another two years.
As more and more knock on affects from the rising price of oil feed into the economy it seems that the cost of living is set to rise still further. Even with the economy as depressed as it is at the moment it seems that we may all have to tighten our belts a little more, although for some people it may be too late.
Share this..
Related stories
One in ten use their credit card daily
New research from Abbey shows that as many as one-in-ten credit card holders - that's three million people - use their credit card daily.Of the 34 million Brits now in possession of a credit card, 54 per cent use their credit card once a week or more 35 per cent use their credit card once a month or less.Abbey found that the most popular use for a credit card was for online shopping, with 61 per c...
Read MoreWhere next for UK base rates?
Despite the fact that many experts, only a few weeks ago, still believed that UK base rates would bottom out at 0% it now appears as though the Bank of England's Monetary Policy Committee (MPC) is set to take a pause this month. It would seem that the introduction of quantitative easing and the apparent threat that inflation could rise substantially in the medium to longer term will see UK base ra...
Read MoreWhen 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...
How does the UK balance sheet look today?
While the UK national debt figure of £1.45 trillion has hit the headlines over the last few days (with many believing it could move further towards £2 trillion before improving) it is worth touching base with reality and the fact that total domestic wealth in the UK still stands at £9 trillion! The figures were released by the Office for National Statistics to show that while the UK is strug...
Read MoreDavid Blanchflower ejected from the Monetary Policy Committee
It would appear that David Blanchflower, a vocal member of the Bank of England's Monetary Policy Committee (MPC), has paid the price for his continued suggestion that the UK was on the verge of a serious recession. He was the first of the MPC members to step forward and predict a recession, something which did not go down very well with the government. While he appears to have left under his own s...
Read More