Back in 2009 when the Bank of England first announced an “emergency cut” in Bank Rates to 0.5pc many economists have been predicting that official interest rates would rise again within a year or two but over and over again Enables IFA’s in Bishops Stortford have seen it stay the same.
The Bank of England Governor Mark Carney had suggested that a cut was likely to come this month but the monetary policy committee again decided to hold it at 0.5pc, and the wider thinking is that a cut down to 0.25pc or even 0pc might not have any real effect as borrowing is already so low that savers have got used to tiny returns.
Some believe bank rates need to stay low so a whole generation of home owners accustomed to low mortgage repayments don’t have to struggle more to cope with higher mortgage rates. A rush of forced sales or repossessions would hit the banks and the economy. David Hollingworth of London & Country, said about 90pc of his customers were choosing fixed-rate mortgages. “More are electing to lock in for longer.”
The other factor to consider with bank rates is inflation and as inflation remains low, it is hard to see what to do, as rate rises are normally used to choke off inflation rather than stimulate it. If you want to talk through what to do as a borrower or a saver Enables’ IFAS are happy to try and help you think your financial planning through.
Source: The Telegraph
Issued by: Enable Independent Financial Life Planners • 25c North Street, Bishops Stortford, Herts CM23 2LD • Telephone: 01279 755950 – Fax: 01279 657339 Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority. It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us. NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE