HK Equity Fund: Bank of England Governor Mark Carney may have to raise interest rates sooner than expected. |
According to Hong Kong’s HK Equity Fund, the United Kingdom’s seemingly strengthening economic recovery may force the Governor of the Bank of England, Mark Carney, to begin considering raising interest rates more quickly as unemployment in the country edges closer to a key level he said could warrant such action.
Mr Carney told investors in August that unemployment in the UK would need to improve to 7% before the Bank would consider raising rates which have been at an all-time low of 0.5% since March 2009.
The Bank of England’s own forecasts suggested that wouldn’t occur until 2016 but according to an HK Equity Fund researcher, “Mr. Carney’s attempt to manage investors’ expectations over the Bank’s long-term interest rate policy has never really been taken seriously because they generally expected unemployment to improve long before 2016. It looks like they were right”.
The UK’s economic recovery has gathered pace according to a slew of data including stronger-than-expected services, construction and industrial production data and is in stark contrast to the euro zone, which is still hampered by anemic growth. The European Central Bank last week cuts its key rate to 0.25% from 0.5% in response to a cut in its growth forecast and a strengthening euro currency.
HK Equity Fund says it views the UK’s economic recovery as a false dawn and warns that the country is not yet ready to accommodate higher interest rates despite a warm reception for the government’s Funding for Lending and Help to Buy schemes both of which are aimed at stimulating demand for real estate.
“Higher rates will put a lot of over-stretched homeowners with large mortgages over the edge,” concluded the HK Equity Fund analyst.
About HK Equity Fund
HK Equity Fund established a presence in Hong Kong in 1995. Today their Hong Kong office is their main hub in the Asia-Pacific region. All of HK Equity Fund’s business groups have operations in the city, making this their largest office in the region outside Australia. From Hong Kong they offer corporate finance and advisory, institutional cash equities and research, equity derivatives and structured products, debt financing and funds management, and environmental financial products, futures, metals OTC hedging and fixed income trading services.
HK Equity Fund provides advisory and capital raising services to corporate and government clients involved in public mergers and acquisitions, private treaty acquisitions and divestments, debt and equity fund raising and corporate restructuring.
Our corporate advisory team combines local knowledge with global expertise through our network of dedicated professionals.
For more info contact: HK Equity Fund Limited 28/F, 8 Wyndham Street, Central, Hong Kong Email Address: email@example.com http://www.hkequityfund.com +85258084873
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