Bank of England expected to hold interest rates steady in June By Investing.com

LONDON – In a recent prediction by Nigel Green, CEO and founder of deVere Group, one of the world’s largest independent financial advisory and fintech organizations, the Bank of England (BoE) is not expected to cut interest rates in June. This forecast aligns with the political climate surrounding the snap general election set for July 4, announced by Prime Minister Rishi Sunak.

The BoE had been anticipated to lower the interest rate from its 16-year peak of 5.25% at the upcoming June meeting. Still, the inflation rate’s rise to 2.3%, surpassing economists’ predictions of 2.1%, has altered expectations. According to Green, the election brings a level of uncertainty that typically discourages significant policy shifts like interest rate cuts, as the central bank aims to maintain its nonpartisan stance.

Green asserts that maintaining the current high interest rates could inflict further harm on the UK economy by suppressing consumer and business spending. Homebuyers could face increased challenges due to higher mortgage payments, leading to reduced consumer spending and a slowdown in economic growth. Moreover, businesses may postpone investment decisions, negatively impacting job creation and innovation.

The deVere CEO also points out that as the global economic landscape shows signs of recovery, with many advanced economies adjusting monetary policies to foster growth, it is crucial for the UK not to fall behind. A rate cut by the BoE could signal a commitment to supporting the domestic economy and align the UK with global economic trends, potentially attracting foreign investment and enhancing export potential.

Green’s analysis suggests that there is no chance of a rate cut from the Bank of England in June, and possibly not until the third quarter of the year. This delay could lead to continued financial strain for households and businesses, as well as broader economic challenges for the UK.

This prediction is based solely on a press release statement from deVere Group and reflects the views of its CEO, Nigel Green. The information provided does not necessarily represent the views of other financial experts or institutions.

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