Interest rates: Top Handelsbanken economist who advised Boris Johnson reveals his prediction for cuts in next six months
Speaking exclusively to The Yorkshire Post during a visit to Leeds this week, James Sproule, chief economist of Handelsbanken, said he anticipates further interest rate cuts in November and February of 0.25 per cent each.
The Bank of England cut interest rates to 5 per cent in August after holding them at 5.25 per cent for seven months.
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Hide AdMr Sproule, a former business adviser to Boris Johnson when he was Prime Minister and a past Chief Economist and Director of Policy at the Institute of Directors, said: “We are looking for a further 25 basis point cut in November and a further 25 basis point cut in February as well and one more in the latter half of next year as well.”


He said he is “sceptical” about expectations that inflation will soon drop below its two per cent target level, leading the Bank of England will substantially lower rates below their current point.
"I think wage rises are a little bit stickier and we’ve seen some initial moves by the Government that would support the idea that wages are going to be sticky over the course of the rest of this year and into next year,” he said.
"That’s going to mean the Bank of England does not have as much scope to lower rates. Already we have seen in the US and Europe and the UK that the pathway of reducing rates has been slower than many expected and it is looking like that is remaining true over the coming 12 months.”
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Hide AdMr Sproule was in Leeds for events this week with current and prospective clients of Handelsbanken, a Swedish based ‘relationship bank’ typically catering for businesses, property entrepreneurs and high net-worth individuals which has branches across Yorkshire.
He said there is “cautious optimism” among the Yorkshire businesspeople he has spoken to about the state of the economy.
"I have been chatting to lots of clients in the last couple of days and in general the feeling is ‘I’m ok, I’m just worried about others’. That is really typical of how business people and also consumers are thinking.”
He said he is advising property investors to identify potential targets.
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Hide Ad"As long as nothing else happens in the Budget, we can look at a reasonable increase in property valuations over the coming couple of years. It is going to be slow because people need to have the confidence to invest.
"But slowly falling constraints and rising consumer confidence should be good for the property market.
"I’ve said to clients, ‘Now is the time to look around’. Line up what you might think of as your primary targets and maybe one comes up in the next year and that might be an ideal time.
"Whether it is student lets or retail property or good-quality accommodation, you are buying that building because it fits well within a portfolio. You are not likely to see further falls and you are likely to see rises. So now is a good time to talk to your bankers so when an opportunity does come up, you can move fast.”
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