Menu

Search

  |   Commentary

Menu

  |   Commentary

Search

Bank of England likely to hike rates in Q2 2016

Great Britain's CPI inflation has been close to zero for most of 2015 but is expected to rise in the beginning of this year as the effects of lower oil prices and the stronger GBP fade away, while medium-term inflation expectations remain around the target of 2 percent.

If the BoE hikes the rates in the second quarter of 2016, then the rate might gradually reach 2.25 percent by end of 2017.

"Our forecast is that the Bank of England will start to hike rates in Q2 2016" - Nordea Bank

The effect of a rate hike on the housing market and foreign flows and/or the risks of Brexit could weaken the GBP by the end of this year. Fed - BoE re-pricing is likely to set pace for the sterling in the forth coming months and the convergence is expected to strengthen the pair.

 

  • Market Data
Close

Welcome to EconoTimes

Sign up for daily updates for the most important
stories unfolding in the global economy.