An improving economy, a strengthening jobs market and hawkish comments from central bank officials: Sounds like the U.S. but it’s the U.K. where talk of higher interest rates is getting louder.
Martin Weale, one of the more hawkish members of the Bank of England’s (BoE) Monetary Policy Committee (MPC), said this week that the country should get ready for a rise in borrowing costs as early as August, the Financial Times reported.
A rate hike may not be imminent but the remarks are significant, economists say. That’s because they highlight a difference of opinion emerging from the nine-member Monetary Policy Committee, which was unanimous in its decision to keep rates at a record low of 0.5 percent in June.
In addition, labor market conditions are proving stronger-than-expected. Data released last week showed that workers’ pay in the U.K. grew at the fastest rate in almost four years in the three months to April.