Investment Clock insights

Brexit uncertainty and low wage growth will keep rates on hold


Ian Kernohan

3 August 2017

As expected, the Bank of England (BoE) kept interest rates on hold, although there was some market nervousness about how many members would decide to vote in favour of a hike.  Given the recent run of economic data, the BoE have had to downgrade GDP growth and wage growth forecasts. 

The Monetary Policy Committee (MPC) have kept the window open for an earlier than expected interest rate hike. However, we still think interest rates will remain on hold until there are clearer signs of a pick-up in wage growth and we get some visibility on the likely impact of Brexit on the economy.

 

The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get back the amount originally invested. The views expressed are the author’s own and do not constitute investment advice.