UK interest rates remain at historic low level
There was more good cheer for the housing market today as the Bank of England's monetary committee voted to keep interest rates at the current level of 0.5%. According to economists rates are unlikely to go up until next year at the earliest. The news will be welcomed by homeowners and those looking to get on the housing ladder.
Interest rates unlikely to increase soon
According to experts the Bank of England is not likely to raise rates because the rate of inflation is also very low at 0.1% and looks as though this will remain at this level for the next couple of months. in inflation rate is actually lower than the sarge set by the government. As long as the inflation rate remains low the Bank of England is unlikely to raise interest rates this year.
The interest rate is set by the MPC (Monetary Policy Committee) when they meet on the first Thursday of each month. The Committee is made up of economists and financial experts who each have a vote on whether to raise interest rates.
Borrowers warned not to stretch themselves
However borrowers and businesses should note that interest rates are likely to rise next year if the economy continues to grow according to experts. The Banks of England has also warned first time buyers not to stretch themselves and to make sure that they can afford to pay their mortgages when the rates go up. Borrowers need to ensure that they can pay their loans when the cost of borrowing goes up.
The Bank of England has also said that we are likely to be affected if Greece leaves the Eurozone. According to Mark Carney this will have a negative impact on our financial markets and has warned that some banks could face liquidity problems.