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BoE unlikely to rise interest rates until mid 2016

Monday, Sep 28 2015
The Bank of England is likely to keep interest rates on hold until the middle of next year rather than raising them sooner, following a gloomier outlook for the global economy, according to the economic forecaster CEBR. The Centre for Economics and Business Research now believes a rise in May or August 2016 is more likely than one in February, its previous prediction. Signs of a global economic slowdown have been growing in recent weeks, especially in the world’s second-largest economy China and emerging markets. 
 
This is likely to stay the Bank’s hand despite reasonable growth rates in the UK, with the CEBR warning that the UK’s performance may not be sustainable if economies elsewhere continue to struggle. It forecasts the UK economy will grow by 2.5% this year, slowing to 2% in 2016 and then averaging 1.7% over the years 2017-2020. In contrast, the Office for Budget Responsibility expects growth to remain above 2% over this period.
 
Sterling is currently being traded above 1.5220 level. Pair is likely to find support around 1.5160 level and resistance above 1.5260 area. Later today, in the US session, Pending Home Sales data is scheduled for a release.
More in this category: « Chinese Industrial Profits down by 8.8% Euro struggling with 1.12 handle »

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