At the end of last year, industry experts weighed in on what they thought would happen to interest rates in 2019. It was obviously a tough forecast to make with Brexit looming, and predictions were mixed.
This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
Some experts projected at least one or two rate increases throughout the year, while others predicted that the Bank of England would choose to keep the rate where it was. There was even a small fraction who thought rates would decline this year.
So, who was right?
Fast forward to now and we can say that one group definitely had it right — at least so far.
Back in March, the BoE’s monetary policy committee unanimously voted to keep the base rate at 0.75% and they further reinforced this decision at the meeting earlier this month, keeping it steady ever since the rate was raised 0.25% last August.
It’s no surprise that many committee members cited the still undetermined Brexit deal as the source of the outcome of their vote.
What’s to come?
With the future of the UK’s relationship with the EU still undecided, industry experts posit that any further talk of rate hikes still depend largely on the Brexit deal. With a few possible outcomes, there are three clear-cut approaches the BoE could take.
Many assume that a deal will be struck, resulting in a gradual tightening of monetary policy. Should a no deal-Brexit be avoided, then we should expect the BoE to raise interest rates in the later months of the year. In fact, some think that once a deal is made, the MPC could raise rates four times by the end of 2020 – the first of which could strike this August.
If there continues to be a stalemate regarding the UK and EU’s future relationship, then the Bank of England may choose to cut rates at their next scheduled meeting.
If we see even further delays to a Brexit deal (a year or more), we could be looking at a rate rise this summer the next time the MPC meets.
Act now
We monitor mortgage rates every week with our Mortgage Monday column so it’s easy to keep track of how the rates are faring. If you’re currently in the market for property, to prevent any ill-effects of the Brexit deal, we encourage you to speak to a mortgage adviser today.
At Dental and Medical Financial Services, we can ensure you and your finances are ready for the mortgage application process and help you find the provider that’s right for you and your needs before another rate hike changes the game again.
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