Our monthly economic review is intended to provide background to recent developments in investment markets as well as to give an indication of how some key issues could impact in the future.

It is not intended that individual investment decisions should be taken based on this information; we are always ready to discuss your individual requirements. We hope you will find this review to be of interest.

MPC vote boosts prospect of August rate hike:

Although interest rates were left unchanged following the Monetary Policy Committee (MPC) meeting on 20 June, an additional dissenting voice has increased the likelihood of a rate rise at the next meeting in August. The Bank of England (BoE) left interest rates on hold last month but by a narrower than expected margin after the central bank’s Chief Economist, Andrew Haldane, unexpectedly joined the minority of policymakers voting to raise rates to 0.75%. This left the nine-member MPC split 6-3 in favour of holding rates at their current level of 0.5%. Rates were increased last November for the first time since the financial crisis, and the MPC had looked set to sanction a second rise in May, until the release of weaker than expected first quarter economic growth figures. However, minutes from the latest meeting suggest the MPC expects the poor early-year growth to prove “temporary” and that the pace of growth is likely to have picked up during the second quarter of the year.SFFS Economic Review_June 18