BoE may raise rates earlier than expected

THE BANK of England (BoE) said yesterday it might need to raise interest rates before the late 2019 date that markets had been expecting, assuming it would leave the EU smoothly. With only a month until a national election, the BoE said the short-term squeeze on households from inflation since the Brexit vote would be more severe than it had predicted, with price growth peaking at more than 2.8 percent late this year. Britain’s economy shrugged off expectations of a recession after last year’s referendum, and chalked up one of the fastest growth rates among major rich economies. BoE policymakers said they could only do so much to offset the Brexit hit to the economy. However, the BoE said it expected a pick-up in foreign trade and investment would offset a shortfall in domestic demand this year. – Reuters