November rate rise being predicted

The Sunday Telegraph reported on the 17^th that interest rates will start to rise in November.

Rates will rise in anticipation of falling inflation in the new year and an increasingly strong recovery, according to predictions from the Ernst & Young ITEM Club.

 Although major risks remain, Peter Spencer, ITEM's chief economic adviser, said that as long as European and US policymakers can allay sovereign debt concerns and calm the bond markets "things should turn out OK". Striking a hopeful note, he added it is "unlikely events will blow up in our face".

Mr Spencer, a former Treasury adviser, has consistently argued that the Bank of England should "hold its nerve" and leave rates unchanged until there is compelling evidence that the country is coping with austerity, so his move is significant.

The market is not pricing in a rate rise until August next year, but Mr Spencer said: "I think they will get a surprise."

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As always, thanks for your attention

Mark ( mark@themortgagemonkey.co.uk  )