Hermes fixed income head: UK could see rates cut next year

Rate rises will be slower than predicted

Hermes' head of fixed income Andrew Jackson has warned it is possible the Bank of England (BoE) could cut interest rates next year, with interest rates having a bigger impact now than ever before.

Jackson said UK rate rises will be slower than predicted, although if the economy is relatively robust, there could be one rate rise this year. However, he added that while there is a "low probability" of the BoE reducing rates in 2019, the likelihood was not "zero", and the UK could "definitely have" no rate rises next year. "If I were the Bank of England I would hold onto as much dry powder as possible," he said. "The UK economy is not on an absolutely stable path. There are enough signs of disquiet to allow the BoE to be dovish. "I think the UK will get one rate rise this year. ...