Interest rate rise: first of many or a one-off?

2 November 2017 - Commenting on today's interest rate rise, Darius McDermott, managing director of Chelsea Financial Services, said: “This was the right move from the Bank of England. In hindsight, the reduction to 0.25% after the Brexit vote was probably a mistake – an overreaction. 

“Today's rise comes as a result of inflation having picked up, but the bottom line is that the UK economy is slowing. There is substantial evidence that the consumer is struggling, as wage growth is not keeping up and disposable incomes are being squeezed.

“This, combined with the continued uncertainty over Brexit, leads me to believe that (to borrow another's phrase): 'this is one and done' for now.

“I'd say there is no need for investors to alter portfolios as a result, and no need for mortgage borrowers to panic. Cash savers may see a small benefit, if banks pass on the rise, but it will be negligible.”

Published on 02/11/2017