No Interest Rate Cut Is Missed Opportunity

No Interest Rate Cut Is Missed Opportunity

The Council of Mortgage Lenders (CML) says it is disappointed the Bank of England’s monetary policy committee (MPC) did not cut base rates in May or Jun, failing to anticipate worsening economic conditions.  CML director general Michael Coogan says “We understand the conflict between slowing economic growth and rising inflationary pressures and the uncertainty over some of the data reflected in the views of MPC members.  However, the MPC had an opportunity to act to anticipate the worsening economic environment today and it is disappointing there has been no change”.

Our view

Given the issues with fuel prices and rising food costs, we do see the Bank of England reducing rates at this time.  A cut will only further stimulate inflation.  

Expect interest rates to remain steady throughout the summer and a possible cut around September or October.  This is when a new fuel pipeline comes on stream and we will see a fall in fuel costs.

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