SMALL rises in interest rates over the next three years will be the ‘new normal’ – that’s the message to residents and businesses from the local representative of the Bank of England.
Graeme Chaplin, the Bank of England’s West Midlands Agent, met companies at an event organised by the Coventry and Warwickshire Chamber of Commerce last week.
He told the group that, based on current economic conditions and the outlook for CPI inflation, ongoing tightening of monetary policy would be appropriate to return inflation to its two per cent target.
Mr Chaplin said: “Rates have been historically low for a sustained period and we are likely to see them increase over the next two to three years.”
The event was organised to allow companies from across the area to give their views on the state of the economy and to help provide the Bank of England with feedback on their businesses.
Similar sessions are held across the UK and help the Bank to build a picture of how businesses are faring.
Topics covered included productivity, Brexit, shortage of labour, pay inflation, general growth and exports.
Mr Chaplin added: “We are in a sweet spot for exporters right now. Sterling has depreciated following the EU referendum, which makes UK goods and services cheaper to buy overseas, and we haven’t yet seen the changes to trade that may potentially come after Brexit.”
Ajay Desai, international trade director at the Coventry and Warwickshire Chamber of Commerce, said: “We are seeing record levels of overseas trade from this region through the support the Chamber offers.
“I would echo what Graeme is saying about exporting, this is a great time to be looking at new markets and we can support that.”