What will the new year bring?
Whilst Christmas is a time to be joyful and relax, reality is only one and there is no escaping what could be coming next year. The Bank of England is under pressure to increase interest rates to ward off inflation, as reports show it could reach up to 4 percent in 2017.
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.
Is the cusp of the year also the turn in the market?
The UK population of homeowners have been enjoying the ultra-low interest rates championed by the Bank of England (BoE) governor, Mark Carney.
Rates were even slashed again in August, even though economic conditions were showing as favourable with growth of 0.5 percent in the third quarter of the year. This unexpected growth following Brexit has raised concerns if rates should have been cut at all.
However. while the homeowners are delighted with getting their hands on low-fixed rate mortgages, savers are in dismay at the pitiful returns they are getting on their years of hard graft and prudent saving.
Theresa May warns that it is having “negative effects”.
Inflation is returning
The National Institute of Economic and Social Research (NIESR), reports inflation is rising and could hit levels of 3.8 percent by the end of next year.
The weak pound continues to push up the cost of imports, which subsequently puts an increase on the cost of living, something almost everyone is already feeling the pinch.
That coupled with a lack of wage growth and record low interest rates on savings, is why campaigners want action, and why there has been an adverse response to yet another rate drop, which has been
The prospect of inflation rising, plus, potentially another rate drop, is the worst nightmare for savers and is likely to be the final nail in the coffin as people start to see their nest-eggs eroded by increased living costs.
The same report by NIESR does predict there will be economic growth in 2017, due to increase trade from the fall in the pound.
Speak to Chris about your mortgage
If you would like us to undertake a review of your current mortgage deal or you are thinking of purchasing in the near future and require funding, please contact Chris for a free, no obligation appraisal.
Tel: 01403 780 770