UK interest rate predictions - are they just guessing?

Experts making UK interest rate predictions previously advised February 2016 as the first month that would see an interest rate increase. The same experts have now revised their prediction stating that July 2015 is now the most likely month for a first interest rate rise.

The likely prospect for the UK economy remains poor and so experts believe that it is unlikely the MPC will increase rates this year or next regardless of the rate of inflation. IHS Global Insight have advised that there appears to be little desire within the MPC to take interest rates any lower than 0.50 per cent. Indeed the minutes of the December MPC did not reveal that discussions took place over reducing interest rates.

IHS Global Insight advise for their UK interest rate predictions that it seems clear to them that interest rates will not increase for some time yet, indeed they add that a rate hike does not seem likely until the second half of 2013. They say that it currently looks possible the BOE may leave the interest rate down at half a per cent right through to 2014.

UK interest rate predictions are volatile in nature and experts often have conflicting opinions as to what will or will not happen and when. One view is for inflation to hold forcing the MPC into a series of rate rises taking the bank rate to 8 per cent by 2012 and, another is for rates to remain on hold until 2014. Who is right? Without being able to see into the future no one really knows.