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It’s not quite time to celebrate yet

It’s not quite time to celebrate yet

k2admin

Interest rates in the UK have come down for a second month in a row.

They are now at 2.6% prompting calls for the Bank of England (BoE) to lower the base rates to 4.6% from their current high level of 5.6%.

But there are a number of uncertainties remaining before it’s time to celebrate.

The first, and most obvious, is US President Donald Trump and his tariffs. There is no certainty about any of his actions and he could change them at the drop of a hat.

Before Trump’s tariff announcements several analysts had predicted that inflation would start rising from April onwards, peaking at about 4% over the summer before falling back next year.

In addition, in the UK, although petrol prices have dropped significantly the full effects of increased bills at the start of the new financial year for both households and businesses has yet to be felt in its effect on prices and spending.

A host of household bills went up at the start of April, on top of continued rent rises.

They included utilities such as domestic energy and water. Council tax also rose significantly for millions of people, and there were hikes for many on phone and broadband contracts, as well as the TV licence.

Growth in the UK economy has been sluggish for some time, although the latest data was more positive than many had expected.

But, again connected to the issue of tariffs, there are warnings that the improvement in UK economic growth could be short-lived with some even predicting a recession.

Still, it is nice to give a glimmer of hope among all the relentless doom and gloom.

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