Over half (58%) of brokers expect the Bank of England to change the base rate by the end of Q2 2020, United Trust Bank’s Broker Sentiment Poll has found.
A further 25% believe the next base rate will change by the end of 2020. Nearly half (49%) expect it to increase to 1% by the end of next year.
Harley Kagan (pictured), group managing director, United Trust Bank, said: “The base rate has been 0.75% for almost a year and there has been plenty of speculation that we’d see another increase by the end of 2019.
“However, the rate of inflation remains under the Bank of England’s 2% target at 1.9%, UK growth for the three months to April 2019 has fallen to 0.3% and with Brexit uncertainty now combined with a new Prime Minister this summer the economic environment calls for a steady monetary policy.
“The MPC will be wary of stifling growth and consumer spending by increasing interest rates and effectively taking money away from businesses looking to invest and putting more pressure on household budgets already squeezed by low wage growth.
“Although interest rates are unlikely to stay this low forever, consensus appears to be that we’ll have at least another 12 months with the base rate held at 0.75%.
“Of course, with less than four months until we reach the new Brexit deadline and government sidetracked by a battle for its leadership, what happens next is anyone’s guess.”
Some 22% of brokers believe the base rate could be changed as early as the end of this year.
Nearly a quarter (23%) of brokers believe that the base rate will remain at 0.75%,while 20% predicted that at the end of 2020 the base rate would be 1.25% or higher.
Mark Carney will step down as Governor of the Bank of England in January 2020. The majority (61%) of brokers said he has done a good job, followed by 25% saying his performance has been average.