M&G's Leaviss: Wage increases key for a change in UK interest rates

A sustained increase in wage level rises could be the trigger for the UK interest rate cycle to move upwards, said Jim Leaviss, head of retail fixed interest and global macro bond fund manager at M&G.

Leaviss was speaking after the announcement of the recent decision by the Bank of England to hold interest rates at the historic record low of 0.25%, having been cut from 0.5% in August 2016 in the wake of the Brexit vote. He said: "I think the one thing you have got to look at, if you want to see what the trigger is for a sustained rate-hiking cycle, is wages, and that is the big thing that is missing really. If we see a wage increase of 3% or higher then we will see rates go up." Some have argued that people have not seen an increase in their wages for as long as 20 or 30 years, sai...