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News Release from: Barclays Wealth Management | Subject: Interest rate decision
Edited by the Insidemoneytalk Editorial
Team on 09 June 2008
Barclays Stockbrokers comments on
today's interest rate decision
Commenting on today's MPC interest rate decision, Henk Potts, Equity Strategist at Barclays Stockbrokers said:
"The MPC finds itself in the middle of a difficult balancing act, involving rising inflation on one side and slowing economic growth on the other "There is no doubt that UK economic growth is moderating - the credit crunch has reduced the availability of credit, the housing market is slowing down and the high street is showing signs of softening
Real incomes are also being squeezed by high inflation, which has the potential to further reduce household demand.
Meanwhile, inflation is way above target and set to go even higher in the coming months.
"However, as you look into 2009, slowing economic growth should reduce capacity pressures and thus inflation, and therefore there is still the possibility the MPC could cut interest rates later on in the year.".
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