The risk of a UK interest rate rise before the end of the year is increasing, according to ACCA Chief Economist Jonathan Ashworth, following the Bank of England’s decision to hold rates at its latest meeting.
Ashworth, a former HM Treasury economist, said renewed pressure from energy prices and persistently high inflation could increase pressure on the Bank’s Monetary Policy Committee to tighten monetary policy in the months ahead.
Commenting on the Bank of England announcement, Jonathan Ashworth, Chief Economist at ACCA, said:
“While the Bank of England kept interest rates unchanged as expected at its meeting today, there is a growing risk of a rate hike before year end.
“A renewed rise in energy prices amid developments in the Middle East is increasing pressure on global central banks to tighten policy, with the US Federal Reserve hiking interest rates yesterday for the first time since July 2023.
“With UK inflation already well above target and expected to rise towards 4% by early 2027, and amid an economy showing some resilience, pressure is likely to increase on the Monetary Policy Committee to act.”
The comments highlight the continuing uncertainty facing UK businesses as interest rates, inflation and energy costs remain key considerations for investment, borrowing and financial planning.
Any renewed increase in interest rates would have implications for businesses and households alike, particularly those exposed to higher borrowing costs or preparing investment and growth plans for the months ahead.
Image provided by ACCA Global
