View more on these topics

Market prices in 50% chance of UK rate rise in 2017


The market is pricing in a 50 per cent chance of a UK rate rise this year ahead of the Bank of England’s monetary policy committee next week.

This week GDP figures showed growth of 0.6 per cent in Q4, while inflation for December hit 1.6 per cent.

Bank of England governor Mark Carney says the monetary policy committee is prepared to tolerate a temporary overshoot in inflation, but that there were limits to this.

An 8 per cent rise in oil prices since the last inflation report has been slightly offset by a small appreciation in sterling.

HSBC is skeptical that there will be a rate rise this year.

Economist Elizabeth Martins says: “We are not persuaded that the MPC is yet in hawkish mode. Mark Carney did say on 16 January that there are limits to the extent to which the Bank will tolerate above-target inflation. But the committee said this in November too.”

However, Martins says HSBC is predicting the Bank of England will raise its growth forecasts for the UK from 1.4 per cent to 1.7 per cent – a long way from the 0.8 per cent it projected immediately after Brexit.

However, she does not see the bank making significant changes to its growth forecasts for 2018-2019.

IHS Global Insight chief economist for the UK and Europe Howard Archer says the Bank is certain to leave rates unchanged at 0.25 per cent at next week’s meeting.

Archer agrees it is likely that the Bank will raise near term GDP and inflation forecasts, but says he will be more interested to see if they alter projections for the the longer-term outlook.



Bank of England downplays low interest rate savings concerns

Bank of England monetary policy committee member Gertjan Vlieghe has hit back at criticism that low interest rates are hitting savers because most UK wealth is held in property rather than bank deposits. Half of the UK household’s net wealth, which totals £10trn, is in property, Vlieghe said at Sheffield University on Monday evening. Only £1.5trn […]


Early interest rate rise poses ‘huge risk’ to economy

The British Chambers of Commerce has warned hiking interest rates too early poses a “huge risk” to the UK economy.  The organisation has downgraded its growth forecasts from 3.2 per cent to 3 per cent for this year, from 2.8 per cent to 2.6 per cent next year and from 2. 5 per cent to […]

Who cares?

By Tracey Dickson, marketing consultant There are almost 7 million carers in the UK – that’s around 10 per cent of the population who provide unpaid care for a disabled, seriously ill or older loved one.1 But according to a report from the charity Carers UK, 20 per cent of people providing 50 hours or more of care […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and thought leadership.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm