Interest rates set to stay at 0.5% till November
Interest rates will not rise before the summer, and probably not until November, according to economists.
In the annual Financial Times survey of more than 80 prominent economists, most viewed with scepticism the theory that the Bank of England will raise rates in the first half of this year. Of the 85 who commented, none believed that the Bank will raise interest rates – currently at a historic low of 0.5% – before the summer.
A majority thought the first rise will not come until November at the earliest. Despite this, 25 of the economists felt that rate rises should come sooner – with some saying they should have already risen.
Those surveyed also suggested uncertainty surrounding the general election in May could dampen the recovery, though they did predict growth will be maintained over the next 12 months.
The upcoming election is touted as one of the most significant in decades, with the result widely perceived as being too close to call.
Another voters’ decision also weighted on recipients’ minds, however: a majority of those surveyed told the FT they would cut their growth forecasts in the event of a referendum on the UK’s EU membership.