Pressure on UK interest rates after US hike

[Luke Masters]

Morning all,

As when the US sneezes we usually catch a cold, I am sure the US interest rate rise will have an impact on the pressure for Mark Carney to follow suit.

The BBC news department seem to think likewise, what is everyone else's opinion on the fallout of this?

Source: BBC News

The US Federal Reserve has raised interest rates by 0.25 percentage points - its first increase since 2006.

The move takes the range of rates banks offer to lend to each other overnight - the Federal Funds rate - to between 0.25% and 0.5%.

The move is likely to cause ripples around the world, and could increase pressure on the UK to raise rates.

It could also mean higher borrowing costs for developing economies, many of which are already seeing slow growth.

Will be very interesting to hear peoples analysis on this

Luke

 

[Ricky Bhurji]

Hi Luke, this is headline news today. I have to admit that I thought interest rates weren't going up as it was just before Xmas. However, I think this is more strategy on the part of the government in case that the economy starts to falter they can always lower them again. But the Fed has gained credibility and by the looks of it - the stock market cheered the news as it went up on the news.

 

[George79]

A lot of the time, the UK follows suit of the US to balance their market and prevent gaps and huge losses. They may hike up the prices but it helps balance things out. People forget that major countries that share similar employments are effected equally.

 

[Le Seb]

I think it's not going to happen for minimum 6 more months but even then it will be verryyyy slow. The government debt is just not sustainable at high interest rates, let alone people borrowing at 95% mortgage. The market needs to cool off and government finances to improve before any substantial hike. I'm other words, I think there is nothing to worry about. Leverage away!