The question everyone will want an answer to!

20th July 2010

Michael Arthan from Barbers comments on The Bank of England’s decision to continue their policy of holding the bank base rate at 0.5% for the 17th consecutive month.

“Now that the new coalition government have put forward their emergency budget and plans to tackle the public deficit, the effect of these proposals will mean less disposable income through rises in direct and indirect taxation for most people. The Monetary Policy Committee may have felt that raising interest rates at this time would potentially stop what is currently very modest growth in the economy.

The last month or so has continued to see lenders trimming their mortgage rates to prospective borrowers with Moneyfacts reporting the average 2 year fixed rate now standing at 4.51%. Recent lending patterns have suggested that borrowers are increasingly opting for fixed rates over variable deals with more people choosing fixed rates in June 2010.

As always the question everyone will want an answer to is - when will interest rates rise? Once again the answer is no-one really knows, from our understanding the opinion currently is that following the announcements concerning public finances and the likely impact that this is going to have on public sector jobs, incomes interest rates are likely to stay lower for longer, but that does not necessarily mean that rates will not start to creep up slowly!”

For further information on how the latest base rate decision affects you please contact any of Barbers offices:

Market Drayton- 01630 653641
Newport- 01952 820239
Shrewsbury- 01743 276200
Wellington/Telford- 01952 221200
Whitchurch- 01948 667272

Your home may be repossessed if you do not keep up repayments on your mortgage.

A fee of up to 1% of the mortgage amount may be charged depending on individual circumstances.  A typical fee is £95.