Don't rule out a rise in interest rates

Article Abstract:

It is quite probable that interest rates in the UK will start to fall again before summer 1999, possibly to 5%. However, official interest rates may have to increase again, possibly quite significantly, as it becomes clear that fiscal policy may eventually play a role in a strong revival in economic growth at the beginning of the 21st century. There are a number of factors indicating that this revival will take place, including the coming rise in public spending and the fact that consumers are not feeling a significant tax burden on their incomes.

Interest Rates

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Strong growth revives risk of inflation

Article Abstract:

The UK stock market now anticipates that interest rates will rise significantly in 2000. Many consumers have taken a similar view, and for this reason fixed-rate mortgages have become extremely popular. It is likely that the next development in inflation will be down, rather than up. However, if economic growth begins to speed up and the Bank of England continues to make interest rate decisions on the basis of the likely level of inflation in two years' time, then fixed-rate mortgages will appear very attractive.

Commercial Banks, Commercial Banking, Commodity & service prices, Banking industry, Prices and rates, Forecasts and trends, Inflation (Finance), Bank fees, Inflation (Economics)

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Don't take the slowdown story for granted just yet

Article Abstract:

It should be a cause for concern that economists unanimously forecast that the UK economy will slow down in 1998. There are certainly sound arguments in favour of this prediction, but this does not guarantee that it is accurate. There is still only limited understanding of the forces that drive the economy, and unexpected developments could make current forecasts completely meaningless. A rise in consumer confidence would mean that the economy would not slow down in the way expected by economists.

Economic development

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