LONDON, February 16, 2011 /PRNewswire/ -- UK interest rates will rise in the first half of this year as inflation creeps up but Eurozone and US rates will stay put, according to Robin Bew, Editorial Director at the Economist Intelligence Unit.
In an interview with financial news website http://www.cantos.com Bew says the Bank of England has been guilty of "undercooking" inflation forecasts thereby undermining its credibility.
"We think that ultimately they're going to have to move in part just to rebuild some of that credibility, so we think rates will go up first half of this year."
On a brighter note, Bew argues the global economy is growing robustly and fears of a double dip recession have receded. Political instability in the Middle East could have a wider impact if protest spreads and with the world still dependent on oil from the region.
The interview and transcript are available now on http://www.cantos.com/eiu
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SOURCE Economist Intelligence Unit