| UK
Interest Rate: 5.25%
UK
Interest Rates Forecast: Further 0.25% rise likely in
the next few months
Bank
of England MPC Divided Over Rate Rise
The
publication last week of the minutes of the most recent
meeting of the Bank of England's Monetary Policy Committee
reveals that the members of the committee were not unanimously
in support of the January base rate increase,
voting 5 to 4 in favour of the rise.
However,
it appears that all members were in agreement about
the need for the rise – the disagreement was over
its timing, with some members supporting delaying the
rise until at least February.
This
leaves the timing of any further rises,
still seen as likely by the markets, in some doubt.
While a majority of city economists expect at least
one further rise, taking interest rates to 5.5 per cent,
there is widespread uncertainty as to its likely timing.
Future
inflation figures are certain to play some role in the
timing of any future increases, but for now no one is
committing to any definite predictions.
RICS
Expects Market To Soften As Affordability Continues
To Worsen
The
Royal Institute of Chartered Surveyors (RICS) has published
a study which shows that it expects higher interest
rates to begin to have an effect on the housing
market over the next few months, especially for first
time buyers.
Both
those who have recently entered the market and those
seeking to do so are likely to be affected, according
to economist David Stubbs, "January’s surprise
interest rate rise is likely to soften
new buyer enquiries in the coming months but those buyers
who have already taken the housing market plunge could
find mortgage companies knocking at their doors in the
near future as affordability conditions bite."
Almost
1 per cent of Britain's 11.65 million mortgages are
currently in arrears, according to the RICS study.
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