BOE rate hikes could see households become more cautious - ING

Omkar Godbole FXStreet Contributor

The Bank of England (BOE) raised interest rates by 25 basis points for the first time in more than a decade in November. The central bank also signaled its intention to gradually tighten its monetary policy over the coming years.

As of now, the market expects the central bank to deliver another rate hike this year. Though the move isn't a done deal, central bank's plans to tighten the screws could have at least psychological impact on consumers. ING strategist write-

"we suspect consumers are more likely to see November's rate hike headlines and extrapolate - perhaps anticipating both faster hikes and a higher end point for Bank rate over coming months and years. None of this is likely to put a major dent in consumer spending, but could see households become a little more cautious in their financial planning."

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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