The Federal Reserve has lowered American interest rates by 0.25% again, so what does this mean for base rates in the UK?
This comes on the back of some better than expected economic news that shows that the US economy did not slump into a recession during the first quarter, as many had feared. The US housing market remains in the doldrums and consumer spending is down, however some positive trading news from major blue chip companies shows that there is still live in the American economy.
The decision by the Fed now raises questions about interest rates in the UK. News that the UK housing market experienced its first annual fall since the mid 90’s must surely help the Bank of England reduce interest rates when the Monetary Policy Committee meets again next week.
The problem for the BoE remains inflation, though, as food and fuel prices are creating an upward pressure on inflation. The Feds decision today, however, must surely mean that interest rates will be lowered in the UK soon.
