As we move towards another Monetary Policy Committee meeting on 1 November the main threat on interest rates remains a no deal Brexit.
The third quarter of 2018 has seen a mixture of economic data that influences the decision. On the positive side:
1) GDP rose by 0.7%
2) Wage growth increased by 3%
3) Inflation reduced to 2.4%
4) Unemployment reduced to the lowest levels for 43 years
And on the negative side:
1) Retail figures slowed
2) Stock markets suffered their worst falls of 2018
3) Industrials highlighted weakening order books and export figures
The likelihood of a base rate rise in November remains unlikely, with predictions of no further rate rises until 2019 still holding firm.
However, if a no deal Brexit becomes a reality the Bank of England will be forced to protect a weakening pound and an unpredictable outcome on base rates.
November Prediction – No Change
Reference – BL041 – Oct – 18