It seems probable - though, crucially, not certain - that UK interest rates will notch up their second anniversary at the record low of 0.5%, when the Bank of England Monetary Policy Commitee's (MPC) next policy decision is announced later today (10 March 2011).
But interest rates will not remain at their current level forever. A 2011 rate rise is inevitable. The timing of the first hike in rates will be crucial.
Recent comments from European Central Bank (ECB) president Jean-Claude Trichet that the ECB is "in a posture of strong vigilance" on the current inflationary threat have been interpreted as a sure sign that an April 2011 rate rise from the ECB (which would take rates from their current record low of 1%, which has been maintained for 22 months) is on the cards. A rate rise from the ECB would significantly increase pressure on the MPC to raise interest rates in the UK.
Current MPC member Charles Bean argues that whether the inevitable UK interest rate rise "dents confidence" hinges on whether it is perceived to be a "nice" rise or a "not nice" rise.
Find out more as to what might constitute a "nice" or a "not nice" interest rate rise in the March 2011 Economic Commentary from XpertHR.
But interest rates will not remain at their current level forever. A 2011 rate rise is inevitable. The timing of the first hike in rates will be crucial.
Recent comments from European Central Bank (ECB) president Jean-Claude Trichet that the ECB is "in a posture of strong vigilance" on the current inflationary threat have been interpreted as a sure sign that an April 2011 rate rise from the ECB (which would take rates from their current record low of 1%, which has been maintained for 22 months) is on the cards. A rate rise from the ECB would significantly increase pressure on the MPC to raise interest rates in the UK.
Current MPC member Charles Bean argues that whether the inevitable UK interest rate rise "dents confidence" hinges on whether it is perceived to be a "nice" rise or a "not nice" rise.
Find out more as to what might constitute a "nice" or a "not nice" interest rate rise in the March 2011 Economic Commentary from XpertHR.
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