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UK Interest Rates Forecasts and Predictions for Home and Property in the UK at 10th December2006
| UK Interest Rate: 5.00% UK Interest Rates Forecast: Changes unlikely before February 2007 at earliest. A Bad Time for a Fixed Rate Mortgage? This year's rises in interest rates seem to be leading to a decline in the popularity of fixed rate mortgages – and with good reason. The consensus amongst most analysts is that interest rates are likely to peak no higher than 5.25%, and may well settle at 4.75% again before the end of 2007. This being so, getting tied into a two to five year fixed rate deal at the moment makes it likely that you will have to pay more interest than necessary for the majority of your fixed rate period. In addition, many of the most competitive fixed rate deals have disappeared over the last few months, as most mortgage lenders have gradually increased their rates in line with the Bank of England's base rate. As Ray Boulger, of mortgage consultants John Charcol explains, "If you believe base rates won't go above 5.25 per cent, there is no point in buying a fixed rate now." BoE's Lomax Concerned Over Rate Rises In a recent speech, Deputy Governor of the Bank of England Rachel Lomax, who is responsible for the Bank's monetary policy, highlighted her concerns over the risks of raising interest rates unnecessarily. She said that "taking out insurance against risks that don't materialise [by raising interest rates] can inject unnecessary volatility into the economy, with consequences for jobs as well as demand." Lomax's position would appear to make any further increase in interest rates look extremely unlikely in the short-medium term, although she stressed that the purpose of the MPC was to ensure a balanced mixture of opinions guided interest rate decisions, and that it was natural for its members to disagree sometimes. |
Latest UK Interest Rates Forecast
Interest Rates Forecast to 10/10/06
Interest Rates Forecast to 20/10/06
Interest Rates Forecast to 27/10/06
Interest Rates Forecast to 7/11/06
Interest Rates Forecast to 22/11/06
Interest Rates Forecast to 27/11/06
Interest Rates Forecast to 3/12/06
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