"It's reasonable to think that given the headwinds that are still out there as well as some the global forces that perhaps the level that we go to three or five years out might a couple of percentage points below that"
- Charlie Bean, outgoing BoE monetary policymaker
Britain's economy is now expected to reach prosperity in the coming years and, perhaps, even overtake German economy. After each stronger-than-excepted set of fundamentals, analysts revive speculations for the upcoming rate hike even despite all comments from the Bank of England. Central bank's deputy governor, Charlie Bean suggested that interest rates could settle at an average of 3% during the next several years, most probably between 2017 and 2019. However, Mr. Bean also warned that there are economic advantages to begin tightening process earlier.
Everything, however, cannot be as bright as some believe. According to a respected Britain's economic forecaster, the EY ITEM Club, the U.K. economy will not return to financial normality for years, due to some structural problems in the labour market. At the moment, the nation's nascent recovery is expected to be hampered by a burden from internal and external risks. According to experts there are now around six million people, who are either underemployed or self- employed, with both desperately wanting to improve their working hours. It can lead to a great frustration in the labour market, as this number is constantly rising. By comparison, in 2008 the figure stood below 4.5 million. Additionally, persistent problems in the Eurozone are weighing on the economic performance, while latest Russia-China gas deal can even ignite a shift in the international trading.
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