Expectations that the Bank of England would raise interest rates this month took a blow this week. A surprise turndown in the UK’s economic growth meant a number of banks pushed back their predictions for when we could see an increase in the base rate.
The Bank of England decided to raise interest rates for the first time in a decade in November 2017 to 0.5%.
Experts have suggested that the next bump up might not be until August 2018, with some even saying we might have to wait until 2019.
The change in heart comes following a GDP release last week, which revealed that the UK economy expanded by just 0.1% between January and March 2018 – the weakest quarter since 2012. A snowy March was partly to blame, with shoppers being forced to stay inside instead of spending their cash on the high-street.
Reuters has suggested that the uncertainty around an interest rates hike will also present a “more volatile backdrop for the UK stock market.”
It’s no doubt a concern for Britain’s savers, who have suffered with savings rates well below one percent since 2008. The next Monetary Policy meeting – where the Bank of England decides on any changes to interest rates – is on May 10th 2018. I suppose we’ll have to wait and see...