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Will interest rates ever rise?

First published:, 12/09/2016

Not immediately—but perhaps sooner than you’d think

No one is going to get too excited about the Bank of England’s expected announcement on Thursday that policy rates will remain unchanged. The Bank’s Governor, Mark Carney, has certainly not ruled out the possibility of another reduction from the current level of 0.25 per cent, but the data to hand concerning the economy this summer has been almost as good as the summer itself. The Bank will hold its fire, pending more concrete evidence of the post-referendum economy, and confirmation of what precisely the new government’s fiscal strategy will be. Yet, for all of these deliberations, we might well ask if something is finally beginning to change regarding the outlook for interest rates, if not immediately here in the UK, then elsewhere.

The Brexit referendum clearly hasn’t fulfilled fears that it would precipitate a global crisis—in truth its impact was always going to be much longer-term, and more imperceptibly corrosive—and the global economy is, despite some problems, surprisingly healthy…Read more: