The Bank of England "should and will" significantly cut interest rates in the coming months to tackle mounting domestic deflationary issues, Bill Mott believes.
Mott – the well-known PSigma Income fund manager – says a benign UK labour market, forecasted unemployment increases, falling house prices and reduced public spending are increasingly deflationary factors for the economy. He says the only inflationary influences on the economy are coming from demand for food, energy and commodities in emerging markets. “At present, in developed nations, there are virtually no inflationary pressures from internal sources,” Mott says. “Quite frankly, it doesn’t matter whether UK interest rates are 5.75% or 3.75%: they will have no effect on the drivers of ...
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