According to the Bank of England, inflation in the UK will be stable at the targeted 2% over the next two years. In this regard, the Bank is not likely to make changes in domestic interest rates anytime soon, in retrospect to recent talks that a slowdown in inflation might lead to the Bank’s having to lower rates to keep inflation levels within the target of 2%.
For now, we see a stable rate of growth in the medium term, at least for the next couple of years. The rate-setting Monetary Policy Committee, however, has indicated that it might have to cut short-term interest rates to stimulate the economy if the expected growth benefits of a stable economic environment does not kick in soon.
Company formation and business solutions experts are confident in the expected upturn in the economy. While rate cuts might be beneficial in the short run, a more stable environment is more likely to give businesses—especially small enterprises—a boost.