Market Outlook: BoE Must Consider the Stagnant Economy

Foreks - Investec economist Philip Shaw argued that the interest rate setters at the Bank of England will have to take into account the increasingly sluggish economy. Manufacturing in the UK stagnated in the third quarter, recording only slight growth compared to previous forecasts. According to Shaw, the strength of the UK economy has clearly waned after a robust performance in the first half of the year. In a note sent to investors, Shaw stated, “The good news is that this situation is likely to make the BOE's monetary policy committee more inclined to lower interest rates in early next year.” Investec expects the central bank to cut the Bank Rate four times next year, bringing it down to 3.75%.