Interest Rates

Be interesting to see how the Bank of England MPC votes today on interest rates. The BoE has already relaxed lending rules, of course – after nearly ten years under the microscope, the waiver of a key element of banks’ capital requirements was one of the first victims of Brexit. A further reduction in interest rates to unprecedented lows will be a further and longer-term downward pressure on sterling; heading a fashion business, a sector that relies heavily on imports, a slump in sterling means more than just a more expensive holiday. The MPC will be choosing between stabilising businesses and bolstering consumer confidence; it’s increasingly hard to see the economy at large avoiding a cycle back into recession.

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