Taipei, Taiwan, May 06, 2019 --(PR.com
)-- Citing lower than anticipated inflation figures, Everitt Lawson Group economists are predicting that the UK Monetary Policy Committee will leave interest rates unchanged for most of this year after the Committee unanimously voted to keep rates at 0.75% when it held its meeting last week.
In the past, the Bank of England has clearly stated that if the United Kingdom is able to avoid a no deal Brexit, interest rates will need to be steadily increased over the next few years in order to stave off inflationary pressures mounting within the economy. Everitt Lawson Group economists say this can be interpreted as one rate increase per year. But due to the delay of Brexit and uncertainty surrounding its outcome, Everitt Lawson Group economists say the likelihood of an interest rate hike during the course of this year has slipped to 25%.
The BoE is not the only central bank to make this shift in monetary policy. After an economic slowdown in China and Europe, the European Central Bank, Bank of Canada and the US Federal Reserve have all indicated that they will hold off on raising interest rates while economic prospects are so uncertain.
The Bank of England was very committed to ongoing tightening of monetary policy and deciding not to raise interest rates in 2019 would go against that commitment but, although unemployment is low and wage growth is good, Everitt Lawson Group economists say there are still valid concerns regarding the UK’s consumer economy and the impact Brexit will have on business investment.