Bank of England Tipped to Raise Rates in Slowing Economy

in banks •  6 years ago 

Bloomberg survey economists on their outlook in UK’s economy. The survey was done one week after May 10 meeting. Economists predict growth will ease to 1.4% in 2018 from 1.8% which is slightly lower than the 1.5% previously forecast. Slower-than-expected U.K. growth this year won’t stop the Bank of England from at least one interest-rate increase, possibly at the August meeting, according to 60% of economists. The reason for that it is believed to be the snowy weather conditions in the first quarter.

BOE Governor Mark Carney said that the growth should probably recover in the next quarter. Statements could be backed up by unemployment levels currently sitting on 42 year low levels.

Regarding what economists say in a BOE report which was published on Wednesday, there was a "marked" slowdown in retail sales, consumer spending will be less than what they expected and export growth will slow to 2.5% this year which is the lowest since the beginning of the survey. Lastly it is expected from the Bank that UK will shift its growth towards exports and investment instead of household consumption. *

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