The BoE’s Monetary Policy Committee (MPC) stating slowing emerging markets as reason
The Bank Of England (BoE) has decided to keep interest rates at their record low of 0.5% which is good news for home owners and buy-to-let investors. The interest rate has now been at this level for over 7 years.
Despite some concerns about the global economy, the BoE stated that the UK’s situation was solid. “A tighter labour market and rising productivity are expected to support real incomes and consumption,” the central bankers said. “Consumer confidence and most surveys of business investment are above historical averages.”
The BoE also said that it is more likely to increase the bank rate than not, while the markets actually expect a cut in interest rates rather than a hike. It would follow the European Central Bank and the Bank of Japan (BoJ), which have both cut central interest rates. The BoJ has even cut the rate into negative territory.
“All in all, there is nothing in these minutes to suggest policy action — in either direction — is likely soon,” said Samuel Tombs, chief UK economics at Pantheon Macro. “We continue to think, however, that inflation will surprise to the upside later this year and throughout 2017, compelling the MPC to raise interest rates at least once before the end of this year.”
With record low rates now is the time to switch and fix a mortgage.
It is prudent for homeowners and landlords to review their current mortgage deals to ensure they are the best rates and to fix to protect themselves from future interest rate rises.