![]() In the three months leading up to April, the number of employed individuals in the UK increased by 250,000, exceeding market expectations of a 162,000 increase and the previous period’s increase of 188,000. Will the BoE follow expectations for a rise to 4.75% this week? We’ll take a look below at the factors that will no doubt influence the board’s decision. The rate of inflation fell to 4% in May, the lowest level since April 2021. Meanwhile, after more than a year of continuous rate rises, the US Federal Reserve last week declared a halt to rate increases, keeping rates at 5% to 5.25%, at least for now. As a result, the Governing Council was compelled to come to an agreement to raise each of the three key interest rates by 25 basis points. At its meeting last week, the European Central Bank (ECB) suggested that ongoing price rises are projected to exert pressure on consumer spending for the foreseeable future, in spite of the fact that there have been signals of a slowdown. One analyst polled predicted that it will peak at 5.50% in Q4.Īcross the Channel, inflation in the Eurozone was estimated to be 6.1% in the year up to May, which was a decrease from April’s rate of 7.0%. ![]() While also according to Reuters, 11 banks have predicted that the peak would be higher, at 5.25%, including five gilt-edged market makers who are main dealers in UK government bonds. Just recently, 52 of the 64 economists who responded to a Reuters poll predicted that interest rates will peak by the end of August, with the median projection placing it at 5.00%. ![]()
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