Phillip Shaw, Chief Economist for Investec, joined Zak Mir and Bill Hubard, Chief Economist for Bullion Capital, on the Tip TV Finance Show to discuss the importance of inflation for both the UK and US in raising rates.
Key Points:
Shaw believed that the process has just begun with the initial rate hike from the Federal Reserve, and the next hike in the US is likely in March once the Fed have had time to see the impacts on the first on the US economy.
In terms of commodities, he outlined a view of a gradual increase over the next few years, but downside risk will remain.
The BoE is not as confident as the Fed over inflation to rise, according to Shaw, who commented that the inflation rate in the UK is just in positive territory, and is a long way off the 2% target. Thus the Bank of England is likely to hold off acting for a while longer and leave monetary policy as it is.
He finished by highlighting that the UK and US have fairly similar economies, and there is often a correlation between rate rises. Shaw concluded that although the UK recovery was not as vigorous as the US economy’s, and the BoE is less confident on inflation than the Fed, he believed the UK won’t be too far behind the US.
We are not authorised by the Financial Conduct Authority of England and Wales. The information and/or data on this website is provided by us and any data providers which may be used by us for your general information and use only and is not intended for trading purposes or to address your particular financial or other requirements. In particular, the information and/or data on the website:
(1) does not constitute any form of advice (financial, investment, tax, medical, legal, spread -betting or otherwise); and (2) does not constitute any inducement, invitation or recommendation relating to any of the products listed or referred to; and (3) is not intended to be relied upon by you in making (or refraining to make) any specific investment, placing any bet or making any other decision; and (4) has not been issued or approved by Tip TV for the purposes of section 21 of the Financial Services and Markets Act 2000 (as amended from time to time).
Opinions expressed by speakers in the videos, writers of the blogs are only opinions and not expert advice. These opinions do not necessarily agree with those held by Tip TV, its directors, agents or employees who disclaim any intent to make betting, securities or securities markets recommendations. The value of investments and the income derived from them may fall as well as rise. APPROPRIATE EXPERT INDEPENDENT ADVICE SHOULD BE OBTAINED BEFORE MAKING ANY INVESTMENT, PLACING ANY BET OR MAKING ANY OTHER DECISIONS.
Recommended Content
Editors’ Picks
EUR/USD clings to gains above 1.0750 after US data
EUR/USD manages to hold in positive territory above 1.0750 despite retreating from the fresh multi-week high it set above 1.0800 earlier in the day. The US Dollar struggles to find demand following the weaker-than-expected NFP data.
GBP/USD declines below 1.2550 following NFP-inspired upsurge
GBP/USD struggles to preserve its bullish momentum and trades below 1.2550 in the American session. Earlier in the day, the disappointing April jobs report from the US triggered a USD selloff and allowed the pair to reach multi-week highs above 1.2600.
Gold struggles to hold above $2,300 despite falling US yields
Gold stays on the back foot below $2,300 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.6% after weak US data but the improving risk mood doesn't allow XAU/USD to gain traction.
Bitcoin Weekly Forecast: Should you buy BTC here? Premium
Bitcoin (BTC) price shows signs of a potential reversal but lacks confirmation, which has divided the investor community into two – those who are buying the dips and those who are expecting a further correction.
Week ahead – BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.