Interest rate growth expected to be sluggish
Interest rate growth expected to be sluggish
Chief Economist Michael Saunders of US investment bank Citi has played down any hopes of a rapid recovery for UK interest rates. Saunders claims that lacklustre economic development in the UK coupled with a similar scenario in global markets spells a significant delay in the hiking of UK interest rates with forecasts pointing to a stationary rate of 0.5% until the fourth quarter of 2013.
The French investment bank, BNP Paribas, also hint at stagnant UK interest rates blaming economic austerity measures and predicting a negligible rise to just 0.75% by the end of 2010.
The news will be welcomed by home owners and shunned by savers who may have looked forward to improved rates after a series of optimistic forecasts by members of the Bank of England's monetary policy committee. Citi's Saunders claims the prolonged squeeze on interest rates is part of the government's countermeasures to combat the national debt deficit by maintaining a weak pound but he also fears a side effect of disproportional inflation with UK consumers left out of pocket by stunted growth in salaries.
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Holiday Lettings24 June 2011
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