Barclays forecasts further rate rises
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.UK interest rates may still have to rise in order to keep inflation on target, according to Chris Wright, the economics director at Barclays Bank.
Underlying inflation fell to 2.5 per cent in January, in line with the Government's target, but the current low level was due largely to the strength of sterling, which was holding down the cost of imported goods and raw materials, said Mr Wright.
"Domestically generated inflation is above the target level and shows little if any sign of slowing," Mr Wright argues in the latest issue of the Bank's quarterly economic review. "In particular, the pace of wage increases is rising, and looks set to climb further unless domestic demand slows sharply."
Output grew by 3.3 per cent last year, unemployment fell, inflation was broadly stable and the current account moved into surplus for the first time since 1985. But manufacturing output declined in the fourth quarter with exporters worst affected, but the domestic economy prospered and wage settlements rose. "This contrast is likely to become increasingly stark in the first half of this year," he writes.
There is no obvious case for adjusting the tax balance in the Budget, Mr Wright says. But the bank expects growth to slow to 2.5 per cent this year and 1.3 per cent in 1999, while the current account shows a pounds 6bn deficit this year and pounds 7bn next.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments