Up until September of 2014 it was generally accepted that the Bank of England’s first interest rate rise would occur in the first quarter of 2015. However, in the past weeks there has been a significant shift in popular opinion regarding the rise, in part due to recent economic data, falling inflation and oil prices.
So when are interest & mortgage rates going to rise?
Mark Carney, Governor of the Bank of England, has issued new ‘forward guidance’ on when the Bank of England will raise interest rates. He has noted that interest rate rises will no longer be linked only with a dip in unemployment rates, but with 18 separate economic indicators.
Due to the latest inflation data, Mr Carney has admitted that the pace and degree of any rate rise has changed from his estimations a year ago. The market has decided that this means that interest rates won’t go up until the latter half of 2015, and perhaps even as late as 2016. Mr Carney has also been careful to note that when rates do rise, it will be a gradual process.
But could other factors influence a rise?
Despite the Bank of England’s change in forward guidance, there are a number of factors which could influence when interest and mortgage rates increase.
These include increasing official support for a rate rise, a growth in the UK economy, optimism over future economic growth, a fall in unemployment, and upgraded UK economic forecasts.
For house buyers, the low inflation a low interest rates could be the best opportunity to secure a low interest mortgage for some time. So if you are considering moving home or buying for the first time contact Naylors Estate Agents for a full selection of properties in the Market Harborough area.