| UK
Interest Rate: 5.75%
UK
Interest Rates Forecast: Possibility remains that
interest rates will rise to 6% later this year
Mortgage
Interest Rates Going Up and Down
Mortgage
interest rates appear to be both
increasing and decreasing - depending on your credit
rating.
In
the last few days, several major mainstream mortgage
lenders have reduced the interest rates for their
fixed rate products.
At
the same time, the UK's largest sub-prime (bad credit)
mortgage lenders have been increasing the rates on
their fixed-rate mortgages - and in some cases removing
the option for lenders to choose a tracker mortgage.
These
changes largely reflect the underlying cost of credit
on the financial markets. Credit for those with adverse
credit ratings is becoming more expensive as a result
of the US sub-prime debacle.
At
the same time, the reducing probability of the Bank
of England increasing the base rate to 6% is causing
the cost of prime credit to reduce slightly.
ONS
Figures Show Strong Growth
New
figures from the Office for National Statistics show
that the British economy has remained in good shape
- at least until very recently. Growth in the second
quarter was 0.8%, giving an annual rate of 3%.
This
is slightly above the Bank of England's forecast and
could lead to rising inflation - suggesting that a
further rate rise could be on the cards.
However,
given the recent market turbulence
and uncertainty over the extent of the sub-prime crisis,
the BoE may well choose to observe the effects of
this year's rate rises for a little longer before
making any decision to change rates.
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