JP Morgan AM: The market expects UK interest rates to stay high for a long time

JP Morgan AM: The market expects UK interest rates to stay high for a long time

26 juni 2023

Rente Verenigd Koninkrijk
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With UK core inflation the highest it has been since 1992 at 7.1% year on year, markets are pricing in that interest rates will have to stay high for quite some time.

However, about 2.4 million households will see their fixed rate mortgage deal expire between now and the end of 2024. So much of the monetary policy tightening that has already been delivered is yet to be felt by households, with the likely resulting squeeze on discretionary spending still to come. With this in mind, it may be that UK interest rates end up lower than the market currently expects by the end of 2024. If so, UK gilts could offer some upside for investors.

26062023 JP Morgan AM

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