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Interest rate update.

Predictions of an interest rate rise have abated and most economists are not expecting that interest rates will move before 2019 from their record low of 0.25%.

This is primarily because of the uncertainty caused by the Brexit negotiations, despite many of the targets set by the bank of England being missed.

Inflation, the primary trigger to any rise, stands at 2.6% in July 2017 above a target level of 2%, this, coupled with wage inflation looking to exceed inflation, normally rings alarm bells, and within the Monetary Policy Committee it has done, but of the 12 members that sit to decide on interest rates only three recently voted for a rise.

Later this year it is expected that inflation will fall back (early 2018) as the impact of the Brexit vote on Sterling wanes, but expectations are that we should see Sterling weaken by as much as 10% against the Euro and the Dollar by spring of 2018 before recovering much of the losses by the end of the year.
When you look at the views of the economists you can see very different opinions as to the future. The rates, as they are today, were set at an emergency level because of the credit crunch, that was 10 years ago, the problem we have now is that we don’t have much wiggle room left to use interest rates as a tool to stimulate the economy.

Interest rate update.
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