UK interest rates might or might not rise

More broadly, the UK is in the midst of a reasonably solid late-cycle expansion. Notwithstanding the international climate, the unemployment rate has recently dropped to a 7-year low (of 5.4%), wage growth is picking up (to around 3.0%), while recent downward revisions to productivity suggest supply-side impediments persist. 

In short, on capacity grounds, there is a reasonable case for nudging interest rates higher. There is also a case on financialstability grounds, given the degree of leverage and the associated volatility of asset prices.

"Given this, the expaectation UK interest rates will start to rise by spring next year is data dependant", added Lloyds bank. 

The latter is likely to be instrumental in determining whether the US Fed will raise rates by the end of the year and, by extension, whether the BoE will follow shortly thereafter. If the Fed begins its tightening cycle, bond yields across the sterling curve are likely to follow US term rates higher.