The Bank of England could raise interest rates by as early as next week, warns Skandia Investment Group.
Rupert Watson, the head of asset allocation, says there is a possibility rates could be raised next week but admits it is more likely that any rate raises would occur in May.
The announcement signals a reversal in Watson’s thoughts on the subject as he previously indicated a belief there would be no raises until the end of 2011 at the earliest.
But ‘hawkish’ minutes emerging from the most recent Bank of England meeting combined with recent data has caused Watson to revise his estimations.
Watson now says a raise in May will be followed by a series of hikes that eventually leads to interest rates hitting 2-3 per cent by the end of next year.