What next for interest rates?

Earlier this week, Andrew Sentence, a former member of the MPC argued for an increase in UK interest rates, pointing out that we are in our 7th year of recovery, with unemployment at 5.7%, close to the 5% thought by many economists to be the “natural rate”. He focussed on the size of the balance of payments deficit – a record 5.5% of GDP last year, as a future problem. The trade in goods and services is not the issue which is declining  as a % of GDP; the problem is the fall in our net investment income (interest profit and dividends from overseas) because of poor performance in the rest of the EU.

However the MPC appeared not to have listened, opting to keep interest rates constant, thereby keeping them  at their current record low level for  the longest period ever. have

http://www.bbc.co.uk/news/business-32234477

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s