Experts had predicted that the Bank of England’s (BoE) Monetary Policy Committee would maintain interest rates this month, so the decision was to hold them at the record low of 0.5 percent was not completely unexpected – the decision has been welcomed in many areas but several leaders of the Birmingham community have spoken out in a report by the Birmingham Post.
Those interested in the mortgages market, such as those looking at taking CeMAP training in Birmingham, are interested to hear how local businesses are faring because it impacts on customers in the long term and the feeling of stability in the market.
Harvey Williams, a RICS West Midlands spokesperson, commented on how maintaining the low interest rates should assist the housing market. He commented:
“House prices in the West Midlands have definitely showed signs of stabilising in the early part of 2010, despite the harsh winter and even in spite of a late return to further snow flurries in early spring. We’ve seen a slightly more flexible approach from lenders emerging which is crucial for the provision of mortgage finance and this is combined with the fact that those looking to buy outstrips the numbers of those looking to sell.”
Birmingham and Solihull Chamber of Commerce and Industry (BCI) policy advisor, Will Rogers, believes companies continue to feel reluctant to spend:
“Our latest quarterly economic survey shows that investment remains historically low. Lack of cash flow and inability to access to finance is still facing many firms. While fears of a double dip recession are slowly receding, confidence needs to be nurtured.”
Another representative, Mike Dell, President of Black Country Chamber of Commerce, added:
“The bank of England is correct to keep interest rates on hold. This decision will enable the UK to maintain price stability and therefore economic stability. Many businesses have experienced a difficult start to 2010, so it is imperative that Monetary Policy Committee maintain interest rates in the near future to ensure that businesses can continue to battle their way out of the recession.
“The Budget revealed some interesting announcements for SMEs, but I fear that the full details of those announcements will not be released until after the General Election. Following the election, it is essential that any rate increases in the future are slow and gradual and have a minimal impact on business”.
It will be interesting to see how long the interest rates are held this year – and many homeowners and those looking to remortgage in the next twelve months will be watching closely.