The base interest rate of the Bank of England will likely remain the same this year, according to some of the UKís leading economists.
A survey conducted by the BBC to gauge leading economistís attitudes towards interest rate rises displayed that a monumental 93% believed that interest rates would remain the same throughout 2014, with over 50% stating that they believed rates would rise in the spring of 2015.
The issue of interest rates has been a hot topic in recent times, with recent growth forecasts and improvements in the countryís economy prompting many to call for a premature rise in interest rates.
Previously, Bank governor Mark Carney had identified that no interest rate rise would be considered until the nationís unemployment rate fell below 7%, which was originally forecasted for late 2016.
However, recent economic performance and consistent decreases in unemployment have moved the data for this threshold to be breached forward to around early 2015, with over 40% of the economists polled believing it could breached as earlier as this year.
Some economic commentators have also argued that the steep rise in house prices this year will force the Bank to raise interest rates in 2014, though the economists who were polled stanchly rejected this view.
Only 7% of those polled disclosed that they believed interest rates would rise in 2016, whilst an overwhelming 79% predicted an increase at some point next year.
Thus far, the Bank of England has refused to apply any premature rise and has reiterated its stance that it would not make any new considerations until that time that unemployment falls below 7% in the country.
Wages to trump inflation
Economists also had positive predictions for workers across the UK, with over 66% disclosing their belief that the rate of wage rises would exceed that of inflation at some point this year.
The rate of inflation has been ahead of wage rises for a long period of time now, and has been cited as a primary factor for the ëcost of living crisisí and decline in the standard of living that people across the UK are currently experiencing.
The remaining 33% of economists believe that wages will be ahead of inflation by 2015, indicating that improvements in living standards are set to happen in the next two years.
Leading economist Kate Barker has called for people to be more concerned with productivity figures this year rather than the unemployment rate, arguing that this is the more significant for judging when peopleís actual wages will improve.
“The real question for the economy this year is not just about interest rates. It’s actually about what is going to happen to productivity, if we see productivity start to recover we could see wages pick up quite a bit without any damage to inflation – so there are more things to look at other than employment,” she said.
There is no doubt that 2014 will be a significant and compelling year for the economic fortunes of the country, with people and politicians alike hoping that the positive effects of the countryís recent growth forecasts are felt.
Whether the countryís workers experience the increase in their standards of livings that is usually associated with an upturn in economic growth is yet to be seen, though it is good to finally see some positive news for the workers of the UK.