At the same time, though, output has only just recovered to pre crisis levels and wage growth is painfully slow.http://xn--canadagoosekbenhavn-67b.nu/ Inflation is also below the BoE’s target and forecast to stay there, making many observers confident that interest rates are set to stay low for the long term.Carney says the “new normal” xn--canadagoosekbenhavn-67b for British interest rates is around 2.5 percent, about half their level before the crisis, and in a newspaper interview on Sunday he said the economy and banks are not yet back to full strength.
Certainly there are strong reasons to expect rates to be lower than before. Greater caution from lenders means that there canada goose jakke i århus is a bigger gap between official BoE rates and those charged by banks, making effective interest rates higher.High household debt levels combined with years of weak wage growth canada goose jakke kolding storcenter mean that household finances are more stretched than before the crisis. A rise in borrowing costs may thus have a bigger effect on consumer spending than previously. Federal Reserve’s caution about raising rates, canada goose jakke køb online combined with economic stagnation in the euro zone, suggests little upward pressure on BoE rates from abroad.
However, investors seem to give little weight to alternative scenarios that could require rates to rise faster from their record low of 0.5 percent, where they have been since 2009.Five year British government bond yields have hit a nine month low of 1.74 percent, reflecting global economic worries more than Britain’s medium term interest rate outlook.