Some 92% of property and asset finance brokers think the Bank of England will further increase the base rate this year, research from UTB has found.
A poll of over 120 respondents found that just 7% believe the base rate will remain unchanged throughout 2018. Surprisingly 1% feel that we could see a drop.
In a further question, brokers were asked to indicate whether they believed Theresa May would still be the Prime Minister at the end of the year.
Scottish homeowners pay out 20% of their disposable income on their mortgage
And 72% believed she would see out the year in Number 10, however 28% believed there would be a change of Prime Minister in 2018.
Harley Kagan, group managing director – United Trust Bank, said: “Since November 2017 when the base rate was increased, speculation about when the next move would come has been rife.
“However, in all the polls we’ve held at UTB, this result has shown the biggest consensus amongst finance brokers expecting a rate rise this year.
“However, although there seems to be expectation that an increase could come as early as May, there are several factors which might cause the Monetary Policy Committee (MPC) to show more caution.
“For example, The Term Funding Scheme ended in February. This provided below market cost liquidity to banks in order to encourage lending to the public and its removal may already be having an impact on saving and lending rates.
“In addition, the Bank of England has so far assumed a relatively smooth path to Brexit, but with substantial divisions within parliament, and within the Conservative Party itself, Theresa May is unlikely to find it easy to guide through her preferred Brexit based on a fragile majority. Indeed, more than a quarter of brokers believe she may not be the PM presiding over the actual Brexit at all.
“With so much uncertainty still surrounding what the UK’s economic and trading position will look like come April 2019, there’s a strong argument for leaving rates alone until the outlook becomes clearer.”