Borrowers Scoff Rate Hold
Brokers, such as John Charchol’s Ray Boulger, note that homeowners can expect to pay £105 more on their mortgage interest because of the Bank of England’s hesitation to cut the base rate by 0.25% recently. As a result, mortgage borrowers all over Britain will see higher payments until the decrease is made.
The delay comes at a time when the cut would have been most needed and justified. Mr. Boulger was among those most expecting the change and added that other “negative economic statistics” supported the impending rate cut.
Mr. Boulger pointed to industry wide price changes and the effects of inflation, such as npower’s 17% price increase, that could poorly effect Britons if the interest cut is not made soon. Although the consumer price index inflation is higher than it has been in the past, it is still only slightly above the central 2% target, Mr. Boulger added.
Despite the slowing effect the global economy is having on inflation in Britain, Mr. Boulger warned, “If the monetary policy committee delays the next cut too long Bank rate may have to fall further than would have been the case with an earlier cut.”
According to MoneySupermarket.com, secured loans could see a rise in popularity this year among homeowners seeking a lower interest rate in the future.