Once again, there are conflicting views in the press this week on whether a base rate rise will happen or not next month, although it seems to be more positive than negative. However, now that we have crashed out of the World Cup, will there be more reason to worry that the economic growth that we’ve seen will not be strong enough to carry a rate rise?
A couple of weeks ago The Daily Mail’s Alex Brummer reported that “with each successive round in the World Cup, consumer demand in the UK strengthens” – so what now?
Well the Office for National Statistics (ONS) this week reported that the UK’s economy grew by 0.30% in May, helped by the warm weather and the Royal Wedding.
The ONS's head of national accounts, Rob Kent-Smith said that the GDP figures “shows a mixed picture of the UK economy with modest growth driven by the services sector, partly offset by falling construction and industrial output,".
"Retailing, computer programming and legal services all performed strongly in the three months to May, while housebuilding and manufacturing both contracted.
"Services, in particular, grew robustly in May, with retailers enjoying a double boost from the warm weather and the royal wedding. Construction also saw a return to growth after a weak couple of months."
But some are saying that as the long awaitied bounce back from a weak first quarter has failed to materialise, even this upturn in May does not make a compelling case for a rate rise.
Others though feel that the May figures were just strong enough to tip the balance in favour of a rate rise and a leading economist at Oxford Economics added that “as long as things are pointing in the right direction, The Bank has made it clear [it doesn’t] need very strong growth to justify a rate rise”.
Only two more members of the MPC need to move across to the hawkish side of the fence and, as David Smith at The Sunday Times points out, “there may be another reason, even if only subliminally, for raising rates now. The next realistic opportunity will not be until November, given that decisions to change rates usually coincide with the publication of a new quarterly Bank forecast. By then, Britain could be embroiled in even more Brexit uncertainty than now, and too close to the cliff edge for comfort”
Savings stories are still few and far between.
The Mail on Sunday reported on a campaign that was launched last month designed to reunite a million young people with lost Child Trust Funds. But it went on to highlight a number of other areas where money could have been forgotten over the years and shows how to go on a treasure hunt to unearth the money that is rightfully yours.
Meanwhile the Daily Mail confirmed that the complex rules surrounding the inheritance of a loved one’s ISA has bamboozled bereaved savers. If you need some help, remember to give us a call on 0800 011 9705 and we’ll do what we can to help.
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