UK Interest Rates Could Rise Four Times Over the Next Year
The Bank of England is expected to hike interest rates as many as four times within the next year, City figures have said, after the economy delivered surprise growth in July. The central bank is expected to be buoyed by this morning’s GDP figures, which saw the UK economy grow by 0.4 per cent in July despite forecasts that growth would grind to a halt. Andrew Bailey is widely tipped to oversee…
The Bank of England is anticipated to raise interest rates up to four times over the next year, according to industry estimates, following a surprise economic growth in July. The central bank is seen as being bolstered by this morning's GDP figures, which indicated the UK economy expanded by 0.4 percent in July, despite predictions of a slowdown.
Andrew Bailey is widely expected to lead an interest rate increase in November, with economists predicting three to four hikes over the next 12 months. The rate is expected to climb from 3.75 percent to 4.75 percent within this period. This morning's stronger-than-expected growth makes an interest rate hike before Christmas a possibility, according to Wealth Club chief investment strategist Susannah Streeter.
The main concern is that higher energy costs will be passed on as increased prices by businesses and consumers. However, the committee may require more evidence before implementing rate hikes. Given the turmoil in energy and bond markets, the likelihood of three to four rate hikes over the next year is expected. If the economy slows and consumers become more cautious, that hesitation may help the bank in busting inflation.
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