Boe Haskel Hints At Not Changing Rates

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Boe Haskel Hints At Not Changing Rates

Boe Haskel Hints At Maintaining The Interest Rates

According to the Bank of England's member 'Jonathan Haskel,' the interest rates shouldn't be lowered at all. As of right now, the interest rate in the UK is sitting at 16 years high amid higher inflation and weaker economic growth.

Financial analysts are citing a 60% chance of the Bank of England cutting rates during August 2024. If this happens, it will be the first time in almost four years, but some policymakers, such as Haskel, are not interested in a looser policy.

Uk'S Inflation To Rise By Year End

Haskel added that the UK labor market is still tight and impaired, which requires holding rates at the current level. He commented on how more certainty is needed that the inflation levels have dropped on a sustained basis.

Given the current situation of the labor market, inflation, & economic growth, BoE's Haskel believes that the best course of action is to hold the rates.

In May 2024, the UK's CPE returned to the 2% target set by the Bank of England. This was the first time in almost 3 years that the inflation has come down to acceptable levels.

However, BoE believes that inflation will rise once again by the end of 2024 due to higher wage growth. As of now, the wage growth in the UK is 6%, which is still pretty high.

Ever since the UK's elections ended, there has been no communication from the BoE. However, Haskel has broken the silence and given out a policy statement.

Haskel also hinted at the inefficiencies in the job market since the pandemic. This is confirmed by the fact that the percentage of people who are working in a job is still lower than in the pre-pandemic era.

Over all, the political uncertainty surrounding the GBP has ended with the conclusion of the UK's general elections. Now, the focus of the GBP/USD has once again shifted towards the BoE's policy.

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