The Bank of England raised interest rates for the second
time in as many months yesterday, to 5.75%. As a result, the UK has widened its lead over the US as the country with the highest interest rates in the industrialized world,
after New Zealand. Moreover, the UK is becoming an increasingly viable alternative to the US as a target for risk-averse investors. The
British Pound is hovering around a record high against the USD, which can
probably expect to suffer prolonged decline against the world’s majors if it
falls behind in attracting risk-free foreign capital. The Financial Times reports:
“The statement accompanying the rate hike gives few firm
clues as to future interest rate movements, with the Bank of England…concluding
that the risks to the inflation outlook are still tilted to the upside.”
Read More: BoE rate decision boosts pound
Original post by Jimmy Atkinson and software by Elliott Back
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