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Will they, won’t they? Today is the day we learn if interest rates will rise

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Written by: Andrew Merrell | Posted 25 October 2017 7:48

Will they, won’t they? Today is the day we learn if interest rates will rise

Speculation over whether we will all be paying for a hike in interest rates will reach fever pitch today when the latest economic data is released.

While we all want to see the UK doing well economically the irony is a strong (ish) performance through the summer from UK plc will be the trigger for the Monetary Policy Committee raising rates on November 2.

Any increase would be the first rise in 10 years and put the squeeze – albeit only slightly – on homeowners trying to pay mortgages and lend a little cheer to savers at the same time.

Speculation is rife – as is the way with such things – but even the great minds of the City of London have been unable to come down with any certainty on one side or the other, such are the mixed signals.

All of which adds that extra tension to today’s publication of the first estimate of UK economic growth for the three months to the end of September from the Office of National Statistics (ONS).

In short – if the figures show an increase in economic activity through the summer a rate rise is apparently likely (but don’t quote us on that) and if growth is nowhere to be seen or the economy is deemed stagnant talk of any rise will disappear.

Most economists predict the ONS will say the UK has expanded by a rather meager 0.3 per cent.

Such a modest figure will see the nation remain in a relatively lowly position in the growth league table of the 20 industrialised nations.

Currently the UK is 15th. Only Brazil is said to have performed worse in the second quarter from April to June.

The figures are also being watched closely because next month the already constrained Chancellor, Philip Hammond, is due to deliver his Budget.

Watch this space.

 

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