Chairman’s Comments: UK Interest Rate Held at 4.25%
Our Chairman David Atherton gives his thoughts on today’s decision to hold UK interest rates exclusively to our website.
Please see David’s remarks below.
In a widely expected move, The Bank of England today held the UK Base Rate at 4.25%. It was expected that two of the nine-person committee would vote for a cut, in the event three did. On this tiny surprise, the pound dipped very slightly against the US dollar and euro for a few minutes and then recovered. The FTSE 100 was almost unchanged.
Governor Andrew Bailey reiterated his message (from the last meeting) that the trajectory is downwards. It is notable that the UK inflation (CPI) report yesterday showed a small annual drop from 3.5% to 3.4%. Everything in the economy moves in slight increments, it’s the direction that is important.
There is further information at https://www.bbc.co.uk/news/articles/c98wyyk475no whose chart we have used.
Markland Hill Wealth Chairman, David Atherton said “Remember that all this is against the backdrop of the Trump trade tariffs, which I wrote about in April (and our view has been confirmed), and the steep April rise in employer’s national insurance, which one might assume has been passed on in prices. These must have been in the mind of Governor Bailey’s team, and yet rates have not risen and will be cut again soon.
A downward path (although not this month) is good news for both personal and business borrowers, and as many mortgage holders are also savers, release more money to save.”
This is our Chairman’s personal opinion and does not constitute financial advice. Markland Hill Wealth work in partnership with many of the premier global investment managers and as further commentary and analysis is available, we will be privileged to share this with our clients. If you wish to talk to an adviser about the effect on your personal position, please get in touch.