Inflation In Spotlight
Published / Last Updated on 28/10/2007
Morgan Stanley is predicting that inflation will be below target level for most of next year. Morgan Stanley believes that the interest rate needs to be below 5.5 per cent to achieve the target level.
The issue of inflation hitting its target level has sparked some experts to call for a reduction in bank interest rates as they feel that it will calm public concerns. However, others feel that it would not help if the government interfered with the base rate and could potentially see the credibility of the Bank of England disappearing.
Our view
As we have always said, expect rates reviews after Christmas. We suggest the second quarter of next year, around March time is when you mat see some interest rate movement.
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