Commenting on Bank of England inflation report today, Yael Selfin, Chief Economist at KPMG in the UK, said:
“The MPC decided to leave interest rates unchanged today, although it also gave a clear signal that we should expect a rise earlier and potentially faster than many might have been anticipating. After over eight years of record low rates, even a slight increase could have a significant impact on households, and both businesses and individuals would be wise to begin preparations for a new interest rates reality.
”The Bank of England is expecting wage growth to accelerate towards 2019, as the labour market continues to tighten and growth remains positive. This should compensate to some degree the fall in real income that households are expected to suffer in the short term, which is also expected to put further pressure on consumer spending.”
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