Previous UK Property Market Forecast and Latest Interest Rate Forecasts and Predictions at 25 1 2008

UK Interest Rates Forecasts and Predictions for Home and Property in the UK at 25 1 2008

UK Interest Rate: 5.5%

UK Interest Rates Forecast: Cut seen as likely by many in February

Bank Rates Down, Mortgage Rates Unchanged

Many homeowners will have expected to see mortgage rates fall by 0.25% in December or January, following the Bank of England's 0.25% cut in the base rate in early December.

Unfortunately, they have mostly been disappointed - especially if they are looking to remortgage with a new fixed rate mortgage.

New research from a leading financial comparison website has found that the average fixed rate actually increased in January - from 7.3% in December to 7.31% in January. Despite the smallness of the increase, this has surprised many who expected a fall.

There are underlying reasons for this - mortgage lenders have had to pay much more than the Bank of England rate when borrowing money - but it looks like the wait may finally be over for people waiting to remortgage.

Several lenders have cut their fixed rates by considerably more than 0.25% in the last week - hopefully more will follow.

Inflation Pressures Continue as CPI Unchanged

Inflation pressures just aren't going away, it seems - meaning it will continue to be difficult for the Bank of England to justify rate cuts.

New figures from the Office of National Statistics show that factory gate inflation rose by 0.5% in December alone - bringing the annual total to 5%. Consumer prices rose by 0.6% last month - meaning that the government's preferred CPI measure of inflation remains above target at 2.1%.

70% Mortgage Brokers Expecting Rate Cuts In 2008

A survey of the UK's mortgage brokers has found that 70% expect interest rates to be lower at the end of 2008 than they were at the beginning. Of the brokers polled, 61% expect rates to finish the year between 5% and 5.4% - while 9% expect bigger cuts that will take rates below 5%.

Latest Interest Rates Forecast in the UK

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