Fixed income stars Jim Leaviss and Ian Spreadbury warn rate rises now would be "near intolerable" for households and expect bank rates to hover around record lows.
Leaviss, head of retail fixed interest at M&G, says a rate rise in the near term could stretch household budgets to breaking point, and he expects to see little or no movement from the MPC on rates until there is evidence of wage inflation. He says: "I cannot see any reason for the Bank to hike rates in the foreseeable future. "People are at the edge of what they can afford to pay, so we expect rates to be low for a long time, and they could be where they are now if we do not get that wage inflation." The MPC has not raised rates for two years, leaving them at record lows of 0.5%. ...
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