Bank of England Unlikely to Hike Rates in September Despite Strong 2Q GDP

Dow Jones
08/13

0812 GMT - A Bank of England interest-rate hike in September is unlikely given the robust economic growth in the second quarter was driven by temporary factors, ICAEW chief economist Suren Thiru says. That included stockpiling drive by the start of the Iran war, unusually warm weather and the soccer World Cup, rather than genuine momentum, he says. Indeed, the 0.4% rise in second-quarter GDP is expected to by followed by a more painful deceleration in the third quarter, as the squeeze on household incomes from higher inflation and energy costs increasingly stifle growth, Thiru says. "The chances of a September rate hike remain slim, given expectations that softer economic activity in the months ahead will ultimately help contain inflation."

 

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