BOE 2018 rate hike still isn't a given - ING
|James Smith, Developed Markets Economist at ING, explains the factors that may make it difficult for the Bank of England to announce a 25 basis point rate hike
Key points
Core inflation to slip back in coming months - 18 months on from the Brexit vote and prices have more or less adjusted to the new level of the pound - or put another way, the rate of pass-through from the weaker currency has begun to slow.
With the economy still struggling to get up to speed and raw material costs rising, some firms may continue to take a more conservative approach to wage-setting with an eye on maintaining margins. It's this latter reason that leads us to think wage growth may not pick-up quite to the extent the Bank has been penciling in.
A lot still depends on Brexit, but whatever is decided, the Bank has a fairly narrow window before the summer if it wants to squeeze in a rate rise.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.