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Is it too early for UK Interest Rate Rises?

Interest RatesThe debate as to whether the time is right for interest rates in the UK to be increased is still rumbling on, and as is the case when the next decision is made there will be both sides of the arguments put to the voting committee, with many commentators speculating that there will not be an imminent interest rate rises for some considerable time.

In fact GBP has been riding high recently, with the vote for an independent Scotland going to way of the No vote, this had the instant effect of sending GBP to some heights in value not seen for months, and whilst the Pound being so strong and having a knock on effect for exporters, those in charge of making the decision of whether to raise interest rates or not as likely to put exporters problems regarding increased costs out for their mind, and will rigidly stick to their commitment to only raise those rates when everything is in place to do so.

Whilst it is unlikely that interest rates in the UK will rise for quite some time yet, it is worth you taking a look at the likely outcome such a rate rise will have, if you are a Binary Options trader or a Forex trader, for as soon as it is announced interest rates will rise in the UK, you will see an immediate effect on the UK economy as a whole and the strength of GBP against other currencies.

There are quite a number of Forex traders who are convinced that when the interest rates do increase into the UK no one will be expecting them, and they are pre-empting the announcement each time the committee meets to decide whether the rates should rise or stay the same.

Whether it will be a shock announcement does of course remain to be seen, for there are some well respected industry commentators who are always on the ball in regards to their predictions relating to the expected announcements.

If you are wondering just what effect an interest rate rise in the UK will have on the value of GBP, then it is to be expected that that currency will grow in value, for many major institutions will want to take advantage of the increased interest rates being offered to savers that will naturally follow.

With the European Central Bank now effectively charging banking institutions to store their cash reserves due to the negative interest rates charged, there will be a lot of investors looking to buy GBP and an immediate and instant raise in the value of Sterling will be expected.

In regards to what Binary Options trades you should be looking to place when and if the interest rate in the UK is increased, you really should look at the entire spectrum of industries on which you can place Binary Options on, for there are likely to be plenty of movements in the value of those companies.