UK consumers upbeat despite rate hikes

08/31/07 - ING Financial Markets

LONDON, August 31 (newratings.com) - Analysts at ING Financial Markets say that interest rate hikes have not had the required slowing effect on UK consumers.

In a research note published this morning, the analysts mention that the Confederation of British Industry’s report showed that 15% retailers have recorded y/y sales growth in August. This figure is consistent with a 4% annualised retail growth rate, the analysts say. Moreover, the quarterly business expectations are at a 12-month high. ING Financial Markets expect that BoE to hike rates to 6% in November, and then cut rates by 25 basis points in 3Q08 and 4Q08.