Five things investors should be prepared for in 2023
By Robbie Lawther, 11 Jan 23
Inflation and interest rates still high on the agenda
The market is wrong on UK interest rates
“Currently the market is forecasting a base rate of roughly 4.5% by the middle of July,” Henry said. “I’m not buying that.
“The Bank of England’s messaging over the past year has been, let’s just say, inconsistent – and as such it can be difficult to get a handle on the true direction of travel. There is already a little disagreement on the Monetary Policy Committee, with the recent move to 3.5% backed by only six out of the nine members.
“We do not yet know the true impact of all of the interest rate rises that we have seen, there is a lag effect before these feed into the real economy, and so I do not think it’s beyond the realms of possibility that the Bank of England decide to pause sooner than expected, based on what I have said about inflation above.
“The Bank of England has long been aware of how leveraged the UK is as a society to house prices and I do not think they would willingly inflict major damage on the property market.”
Tags: Quilter Cheviot
