Investors’ fears that central banks will tighten – or at least stop loosening – monetary policy sooner than previously thought have prompted both UK equity and bond prices to fall sharply. Upward revisions to expectations for official interest rates have been more pronounced in the UK than in either the US or euro-zone, reflecting the bigger turnaround in news on the UK economy than overseas. Our view remains, though, that a hike in Bank Rate within the next two years is unlikely, given the big challenges ahead for the UK’s economic recovery. Indeed, we still think that Mark Carney will make an interest rate pledge soon after he arrives at the Bank of England next month.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services