To raise, or not to raise. That is the question facing the Bank of England and the Monetary Policy Committee who will meet on the 2nd November to release their latest interest rate decision. Aside from ongoing concerns over Brexit and the UK economy, the prospect of an interest rate hike has been a major driver on the pound. Inflation data told us Inflation remains high but it was commentary from BoE members which caused concern and sterling has actually ended today lower.
I personally think that is it unlikely the BoE will raise in November. Whilst there is now a more compelling case for a rate hike ultimately I feel there will be too many negative effects, the overall message it sends it against the grain of how the economy should be directed. UK economic growth is slowing, much worse than the rest of the world and any rise could hamper growth. raising interest rates could easily see a downturn in consumer spending plus it would raise the price of credit for anyone new borrowing for business.
Right now the UK needs to keep the economy fluid to try and manage the potential negative economic results from the uncertainty over Brexit. Whilst I am sure ultimately Brexit will be made to work and the UK will flourish, no one can say now exactly what will happen. Trying to make the plans as clear and as direct as possible in the coming weeks and months could be fraught with difficulty.
Trying to manage the UK economy at present does I believe deserve a more soft outlook relating to the prospect of raising interest rates. If you have a transfer to make then making some plans in advance is I believe the sensible option. Expecting the pound to rise sharply on a UK interest rate hike is I believe a very dangerous game. What could be more likely is that we see the BoE raise rates but with a very soft commentary around this, the pound does then fall.
If you have a transfer to make in the coming weeks then making some plans in advance is sensible as there is so much potential for an unexpected shift. If you wish to run through or discuss anything then please speak to me Jonathan Watson by emailing firstname.lastname@example.org to discuss further.