Reprieve for home owners as mortgage rise may be deferred

February 1, 2016 by Brendan

Rates

An increase in the Bank of England base rate may be on hold until 2017, according to https://www.beaconfinancialtraining.co.uk/wp-content/uploads/2020/06/cemap-online-and-classroom-training-uk.jpg Carney, the governor of the Bank of England.

The bank had produced forecasts of the inflation rate, and as it hasn’t quite reached the Bank’s predicted 2%, it is too soon to increase interest rates, according to Carney. Factors which have affected the level of inflation include a poor global outlook and cheap oil prices. The base rate is likely to remain at 0.5% for a longer period than expected.

Carney stated that the fall in inflation was due to the collapse of oil prices, with the level currently at 0.2%. The governor of the Bank of England believes that the level of inflation is likely to remain low for some time. Last year, Carney had warned that interest rates would start to increase, by small increments. However, he recently remarked:

“…the year has turned, and, in my view, the decision proved straightforward: now is not yet the time to raise interest rates.”

He added that the interest rates will only be increased when the economy is stable, and won’t be dependent on a calendar. The Monetary Policy Committee (MPC) has stated that it expects inflation to reach the predicted 2% in a couple of years.

This will be welcome news to home owners who have outstanding mortgages, especially if they are considering moving to a new home. Mortgage advisers are CeMAP qualified so that they have knowledge in this particular area and can advise borrowers accordingly.