Bank Rate to rise sooner rather than later, MPC's Forbes says

Britain’s economy will continue its expansion despite all the hyperbole in financial markets regarding the slowdown in emerging markets; hence Bank Rate is headed higher “sooner rather than later”, the Monetary Policy Committee’s Kristin Forbes said in a speech.

“Based on what has actually occurred to date, the limited direct exposure of the UK to emerging markets (even when incorporating second-round effects through other countries such as Germany), [the risk of a more pronounced slowdown] appears manageable,” Forbes told her audience.

That is particularly so given the strength of the UK’s internal economic expansion, “which shows all signs of continuing, even if at a more moderate pace than in the earlier stages of the recovery”.

Speaking at the Brighton Summit 2015, the American Economist also pointed out how UK exporters had ‘missed the boat’ when it came to selling to the fastest growing emerging markets – something they should look to rectify.

Indeed, if the UK increased its trade exposure to emerging markets to shares similar to the US then the UK might be able to cut its trade gap in goods and services with the rest of the world by somewhere between two-thirds to wiping it out completely and generating a surplus, she claimed.