There is a one in five chance of a Bank of England rate rise coming as early as next month, according to bond provider Minerva Lending.
Since the Bank won its independence in 1997, it has raised interest rates 20 times and four of those hikes fell in the month of November, analysis shows.
It is the most popular month for Monetary Policy Committee (MPC) adjustments with a further three rate drops among the Bank’s 46 adjustments over the last 20 years.
Minerva Lending says this likely pushes a rate rise into 2018 as December has never seen a rise. August is the MPC’s second favourite month in which to act, with six MPC decisions over the two decades.
While Bank governor Mark Carney recently warned rates are set to rise in the “near term”, the odds of a rate rise could be longer as Bank Rate has never gone up with GDP growth below 2.5%.
Former governor Eddie George oversaw the first post-independence rate rise in 1997 with three more following in 1999, 2003 and 2006.
However, the economy was much stronger in all four years, with GDP growth averaging a healthy 3.1% compared with today’s meagre 1.5%.
The Office for National Statistics (ONS) last week revised down the annual GDP forecast to the end of June from 1.7% as economists suggested growth in the third quarter may be no higher than 0.3% as inflation hits confidence.
Ross Andrews, director of Minerva Lending, said: “When the Bank has raised rates in November, it has always done so against a strong economic backdrop.
“But with some economists predicting GDP could slide below 1% for 2017, Mark Carney and the other members of the Monetary Policy Committee will be wary of further damaging already weak consumer spending and sentiment, and increasing borrowing costs for inflation-hit households.
“While the governor may be concerned by high levels of household debt, history suggests that a rate rise is far more likely to come in early 2018. This is clearly not great news for savers.”
