UK sees first positive real interest rates since 2008 as BOE outpaces inflation

Quick Take

The United Kingdom is experiencing a noteworthy economical improvement – Positive existent rates – for the archetypal clip since 2008.

This occurs erstwhile the Bank of England (BOE) involvement rates surpass Consumer Price Index (CPI) inflation. Currently, the UK’s CPI ostentation sits astatine 4.6%, portion the BOE maintains involvement rates astatine 5.25%. Comparatively, during a little spell successful 2015, but involvement rates were little than 1%.

The BOE whitethorn respire easier with this development, but it’s worthy noting that the unemployment complaint remains astatine a secular debased of 4.2%. The noteworthy question is whether ostentation volition halt astatine the mandatory 2% oregon descend lower, perchance starring to deflation. The BOE’s ongoing situation lies successful curbing wage inflation, which remains stubbornly precocious successful economical terms, creating an obstacle for the slope to execute its 2% target.

UK Interest Rates vs Inflation: (Source: Trading View)

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