Bank of England Economic Concerns Run Deep
Recently released figures regarding the state of the economy paint a more discouraging picture than what has been evident for some time. The Bank of England now believes there is a 10% chance the UK is on track to drop into another recession within the next eighteen months. A forecast bleaker than any other since early 2010 has been projected. The current state will surely cause even more competition among UK lenders for original loans as well as remortgages.
The base rate has less chance of being hiked now in the near future as well. Spencer Dale and Martin Weale, both of the Bank of England Monetary Policy Committee, have abandoned their position to hike the base rate by a quarter of a point. They were the only MPC members seeking a hike in the base rate during the last monthly meeting.
James Knightley, economist at ING Financial Markets, commented on the recently released figures involving the economy, saying: "Today's figures add weight to the view that a hike in rates remains a distant prospect – at least 12 months in our view – while an expansion of QE remains a clear possibility."
Simon Ward, chief economist at Henderson, commented on the crisis which started in 2008, saying: "They are more worried about recession now than they were when we were actually starting one last time."
He added: "Probability of a double dip is greater than these forecasts as the Bank calculates growth on a year-on-year basis".