UK: D-day is nearing, expect rate hike in early 2016 – ING

By FXStreet FXStreet (Delhi) – James Knightley, Senior Economist at ING, suggests that the UK economy is in good shape and we can see BoE raising rates in the early part of 2016.

Key Quotes

“The UK economy is looking very healthy, with the consumer sector in particularly good shape. While there has been a bit of a wobble on employment recently, which we attribute to corporate caution surrounding the General Election in May, pay rates are picking up and the supermarket price war and lower energy prices are boosting spending power. Consequently, consumer confidence is at its highest level in more than 15 years, demand for credit is rising and spending growth is robust.”

“With business activity looking good and the trade balance actually improving, the Bank of England (BoE) remains on course to hike interest rates in early 2016.”

“Indeed, BoE Governor Mark Carney, speaking at the Kansas Fed’s annual conference in Jackson Hole, suggested that recent financial market volatility and worries about China do not “merit changing the MPC’s strategy for returning to inflation to target”.”

“Domestic strength still means that the decision when to raise rates will come into “sharper relief” around the turn of the year. Despite our positive assessment on …read more

Source:: FX Street