Chris Iggo, senior strategist at Axa IM is predicting an interest rate hike in view of Thursday's MP...
Chris Iggo, senior strategist at Axa IM is predicting an interest rate hike in view of Thursday’s MPC announcement.
“Second guessing the MPC has become even more challenging of late, given the wide range of views on the committee and the swings in recent voting patterns. Some are clearly worried about inflationary pressures coming from the housing market and stronger corporate pricing power,” he added.
“Others see some leading indicators of inflation being more encouraging, such as modest wage growth, lower import prices and an expected slowdown in the housing market. There is every chance that more upfront inflation concerns will prevail and the bank rate will be increased to 5.5%.”
However, Iggo believes lower inflation and slower economic growth will strengthen the case for lower interest rates again later in 2007.