Debate on rates moves from inflation worries to concern over consumer spending
UK interest rates are expected to remain on hold for 2005 but could drop to 4% by the end of 2006, according to John Butler, UK economist at HSBC Bank. He said: "The interest rate debate has shifted away from worrying about inflation, as wage growth has remained subdued, to worrying about consumption. While fundamentals remain sufficiently supportive, it is too early to expect interest rates to be cut but they now seem unlikely to go up anymore. "We predict interest rates to remain unchanged at 4.75% for the rest of the year and expect cuts to 4% by the end of 2006." Butler feels the r...
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