Choosing your base rate camp

Article Abstract:

United Kingdom interest rates have been raised to 7% from 5.75% between Nov 1996 and Aug 1997, and the consensus is that they will only be raised by 0.25% more. This would give a peak in rates of approximately the level of the trough in 1988 around half of the 1990 peak. Charterhouse's Richard Jeffrey forecasts a rise in interest rates to 8% or above by year-end 1997. There is still the problem of the high value of pound sterling. The pound fell in value after a statement on interest rates by the Bank of England, but is likely to remain high while domestic demand is strong.

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What's at stake in the rate debate

Article Abstract:

United Kingdom interest rates are likely to be unchanged in early Oct 1997, but the significance of this is not clear, since rates could have peaked or may be raised again. Stock prices tend to rise following a peak in interest rates. Economists and the stock exchange are undecided on whether a peak has been reached. Consumer stocks are likely to perform better than industrial stocks if rates have reached a peak, and the impact of rates on pound sterling may be less than supposed.

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Rate cuts may bring bad news for profits

Article Abstract:

The impact of British interest rate policy and of a possible reduction in interest rates are examined in detail.

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