The Bank of England rate remained again at 0.5pc in December 2014, however results from a survey by the Treasury shows leading UK economists predict rates will double in the next 12 months. What would this mean for you, your mortgages and your savings accounts?
What the experts say
With no crystal ball and a General Election this year it is difficult to determine the picture of interest rates at this time next year.
Experts are suggesting a rise and have been for some while, so it can’t be ignored as a possibly.
UK interest rates have remained low since 2009 in efforts to assist a weak economy, although with the situation slowly, it would seem, emerging from dark clouds, change could be on the horizon.
Some economists predict a rise in March or April 2015 prior to the Election, whilst others are suggesting it will be following. Whilst 1% is the average amongst City experts and banks, a proportion of these foresee a greater rise to 1.5% or 1.75% in 12 months.
Do you have savings?
For those with savings and investments, a rise in interest rates will be welcomed as currently savers, particularly pensioners, are seeing very little return for their years of squirrelling away the pennies and pounds.
Do you have a mortgage, or debts?
For property owners with a mortgage or those with debts, any rise in interest rates could see increases to your monthly outlay, depending on your current set up.
The flip side of the coin is that Office for Budget Responsibility (OBR) has predicted 3% growth in 2015, leading to payrise opportunity. It is also expected that wage increases this year could be higher than inflation for the first time in five years.
Call the Dental & Medical Financial Services team to discuss your mortgage, savings and general financial position to prepare in advance for any changes to the rates this year.
Tel: 01403 780 770