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Interest rates: BoE plans could be taking advantage of pre-Brexit conditions
Stuart Law, CEO at Assetz Capital
“The Bank of England should be cautious about raising interest rates by too much in a short space of time. There’s a high probability that any rises could simply be a way to take advantage of the opportunity, whilst it exists, to hike up interest rates ahead of Brexit in case there is a need to then drop them again.
“It’s also unlikely that peak interest rates will rise above 2% in this cycle, and even 2% could prove too painful for many. The Bank of England and the government should be far less concerned about offsetting inflation by raising interest rates at speed, as the inflation rate is likely to decrease in the near future.
“Instead, the government should look to alternative tactics in order to manage a possible credit bubble in several asset classes, in a similar way to the use of stamp duty to slow the London property market and new taxes to slow the buy-to-let market.”
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