Interest rates still have higher to go

The prospect of synchronised world growth in 2000 will put more upward pressure on interest rates. In the US, while inflationary pressures remain subdued, the pace of growth is well above the expected long-term sustainable rate, even after making an allowance for improved productivity, and the fact that unemployment levels are very low. Fears of further interest rate rises have surfaced following hawkish comments by Federal Reserve chairman, Alan Greenspan. Although economic growth has picked up in the UK the overall rate is not strong enough to give rise to significant concerns over in...