The National Institute of Economic and Social Research (NIESR) said the Bank of England should raise rates tomorrow, but should tell the public that it would be making U-turn if Brexit talks stall or trade tensions with the United States escalate.
The National Institute maintained its forecast for UK economic growth of 1.4 percent this year and 1.7 percent next year. It said the Bank of England should raise rates on Thursday for the second time since the global financial crisis.
Interest rates are expected to rise gradually and limited on the assumption that Brexit is going smoothly. Mark Carney, governor of the Bank of England, has suggested that interest rates may be reduced in some scenarios if there is an irregular Brexit.
