Where blossomed many an incense-bearing tree

Indulge me, but for those who saw my last post, the heading will make sense.  As a follow up to my garden related synopsis of the UK economy, Tuesday saw that the inflation figure for the UK has fallen below 2%. This is interesting as it is the first time that it has dropped below the Bank of England's target for inflation for four years. Secondly, it adds more credence to the view that interest rates are not going to rise any time soon in the UK, despite the pick up in GDP and the unemployment rate dropping close to the 7% mark. 

The latter, you will remember, was the rate at which the Bank of England would start to even consider interest rate rises.  Despite the media's best attempts to whip up fear about interest rate hikes on the way,  this was never the trigger that the Bank of England would have used to increase rates.

As I mentioned in January, it really does seem that interest rate rises are still some way off, as at least for now, the UK enjoys GDP growth and low inflation. 

 

 

Matthew Phillips

Managing Director

Telephone: +44 (0)20 7893 3456
Email: getintouch [@] broadstoneltd.co.uk