23rd April 2018

Markets reassess likelihood of May rate rise

This week the fickle nature of economic forecasting was at the fore, with just a handful words from Mark Carney enough to cloud crystal balls over the country. This pattern is well worn – the market gets too confident that it knows exactly when the Bank will raise rates and then freaks out when reminded that all it’s really doing is guesswork.


The pound fell against the dollar after this latest reality check. Thankfully the next Monetary Policy Committee meeting isn’t that far away; rate forecasters will soon be put out of their misery, at least for a week or two.

Elsewhere, in Brexit news we got a glimpse of an overlooked problem with “taking back control”; that control will go the Home Office, which at this point more resembles The Office than a functioning government department. The current crisis of “Windrush Generation” immigrants having their rights removed, by a change in policy decades after they arrived, will hardly fill the EU with confidence that the rights of EU citizens in Britain will be protected post Brexit. This makes any agreement where the European courts aren’t appointed as a watchdog, much harder to reach


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