Recent developments suggest that the Bank of England and, perhaps, the US Federal Reserve may make their first rate hikes a little sooner than we had expected a month or two ago. However, global monetary conditions are set to remain exceptionally loose for at least two more years. The pace of rate hikes in the US and the UK is likely to be slow by historical standards while the ECB and Bank of Japan may yet loosen policy further. That said, the Fed is likely to raise rates more rapidly than the Bank of England, leading to a significant divergence in rates during 2016.
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