BoE Expected to Wait Until 2015 for Rate Move

British interest rates will rise from record lows early next year as the UK economic recovery outpaces Europe’s and inflation picks up, a Reuters poll of economists forecasts on Wednesday.

Although Bank of England Governor Mark Carney recently said a hike is getting nearer, only six of 60 economists polled this week expect it to happen this year, 48 forecast it in the first quarter of next year. Six see it coming later.  Recent strength in the British economy comes at the same time as a fall in inflation, which slowed to 1.5 percent in August — stubbornly below the Bank’s 2 percent target, but is expected to pick up in the coming months. GBCPI

In the euro zone, Britain’s biggest trading partner, inflation is at a five-year low of just 0.3 percent and the bloc’s economy stagnated in the second quarter.  Dwindling demand from the euro zone has hurt British factories, with the latest data showing UK manufacturing grew at the slowest rate in 17 months in September.

Reuters

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.