Commentary: Interest Rate Announcement

William Marshall, Chief Investment Officer, comments on the today’s interest rate announcement.

21 Mar 2024

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Commenting on today’s interest rate announcement, William Marshall, Chief Investment Officer at Hymans Robertson Investment Services, says:

“Wednesday’s inflation news would have pleased the members of the Monetary Policy Committee as the data continues to make good progress towards target. Today’s meeting was always going to be a hold in interest rates, but the prospects for a rate cut in Summer have improved. That being said, the last piece of the jigsaw continues to be the labour market. Wage growth north of 5% means a risk of further inflationary pressures remains.

The data is moving in the right direction albeit slowly. Given the added uncertainty over the validity of the ONS Labour Force Survey it’s reasonable that the MPC will want to wait a bit longer before cutting. Falling inflation and the expectation of lower interest rates help to boost asset prices. Although cash rates are high now they are expected to fall, making assets like bonds where investors can lock in high yields look more attractive.”