What will happen to interest rates in 2017

Interest rates have been stuck at record lows for the best part of seven years and there is little prospect that this situation is going to change any time soon. The Bank of England’s bank rate is currently at 0.25 per cent the lowest it has been at in modern times. It cut the rate from 0.5 per cent in the aftermath of the Brexit vote in June when it was widely anticipated that the British economy would fall into recession. But that didn’t happen with growth particularly in the service sector – holding up. The Bank’s governor, Mark Carney, indicated in July that rates were likely to be cut further but that is now looking less likely with rising import costs putting pressure on inflation. Interest rates to rise? Yet despite the fall in the value of sterling since the referendum, Mr Carney has said that it is unlikely that it will be raising rates. He said in October: We re willing to tolerate a bit of an overshoot in inflation over the course of the next few years in order…
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