Rate Rise in May ... not if Carney has his way ...
It all seemed so straightforward. Just a few weeks ago, markets expected rates to rise in May. Two gradual rate rises of around 25 basis points this year would mean base rates around 1% by the end of the year. Two further rate increased of similar dimension in the years ahead, would suggest rates would be around 2% by the end of 2020. All is clear, or so it seemed.
Michael Saunders is a hawk. He voted for a rate rise in March along with Ian McCafferty. At a speech in Strathclyde this week, Saunders argued future increases may be "gradual" but they need not be "glacial". It is a subtle distinction. It must have been very cold in the North of Scotland, the only way to make sense of this.
Check out the update here JKA
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