When will UK interest rates peak?

When will UK interest rates peak?

The issue of interest rate rises will prove critical for politicians and investors alike over the next 12 months, says Neil Williams, group chief economist at Hermes Fund Managers.

Financial markets have become increasingly sensitive to deviations from the ‘forward guidance’ set in train by the US Federal Reserve and Bank of England. In the UK, the risk is Bank of England Governor Mark Carney’s new, ‘son of forward guidance’ – based on cutting economic ‘slack’ – proves so vague it stretches credibility. Unlike the Federal Reserve, the BoE has moved not just the goalposts (by pushing back its unemployment thresholds), but also the rules (by devaluing unemployment as the key policy driver). It now monitors 18 different indicators to guide us towards that first Ban...