When interest rates could finally come down to lift burden on mortgage holders | Personal Finance | Finance

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Bank of England’s interest rate decision discussed by expert

Finance industry experts are increasingly hopeful that a base interest rate by the Bank of England could come as early as May.

The Bank’s governor, Andrew Bailey, and the Monetary Police Committee (MPC) decided to hold the base rate at 5.25 per cent this week.

However, Mr Bailey later signalled that providing inflation remains on track to come down to 2 per cent they are open to a rate cut – possibly in May.

At the same time, City experts are suggesting it could be the first of three or four before the end of this year.

The MPC voted 8-1 to keep the base rate on hold this week in order to ensure the inflation risk is over.

Coins in a persons hand

Brits are struggling under the pressure of the cost of living crisis (Image: Getty)

However, many Conservative politicians and City experts have warned that excessive caution is holding back economic recovery.

Rob Gill, Managing Director at Altura Mortgage Finance, told Newspage: “The first cut in the base rate seems set to come as soon as May.

“With the US Fed indicating three rate cuts this year, our weaker economy could see four delivered, taking the base rate down to 4.25 percent.”

Bob Singh, Founder at Chess Mortgages, suggested a base rate cut could bring a return of the brief mortgage price war seen at the beginning of this year.

He said: “Despite repeated calls for rate cuts from across the economy, and all manner of economic data deteriorating, the Bank has still failed to cut.

“How bad does it have to get for the Bank of England to start chipping away at the base rate? The first cut could come as early as May, especially if inflation moves close to target before then.

Recent evidence of big increases in personal and business insolvencies, together with a rise in mortgage arrears confirm high interest rates are causing real misery.

Richard Thompson, Director at Abbeydale Mortgages, said: “I expect a reduction of 0.25 percent in the base rate at the next meeting in May.

“This projection is largely influenced by the recent decline in swap rates and the notable drop in inflation to 3.4 percent in March.

“I firmly believe a cut is needed not just to alleviate the pain of borrowers but to stimulate consumer spending on the high street.”

Graham Cox, Director at SEMH Self-Employed Mortgages, said: “My money is on a rate cut at the next Bank of England MPC meeting on May 9.

“Andrew Bailey indicated yesterday that cuts could happen before inflation hits its 2 percent target, so it seems even he’s convinced the economic pain is real and stimulus is now required.”

Dariusz Karpowicz, Director at Albion Financial Advice, said: “Chances of a cut have been bolstered by the latest data revealing a stagnation in retail sales for February, underscoring the economy’s pressing need for stimulus.”

Hand counting coins from broken piggy bank.

The MPC voted 8-1 to keep the base rate on hold this week (Image: Getty)

Chief executive at Habito, Ying Tan, said: “A base rate cut is urgently needed to stimulate a stalling economy and inject some much-needed confidence into consumers and businesses.

“The Bank of England must act decisively and swiftly at the next meeting. “

Jack Tutton, Director at SJ Mortgages, added: “The Bank of England have to be seriously considering cutting the base rate when they meet next in May.

“They missed a trick by not cutting it yesterday and injecting fresh confidence into the UK economy.

“The markets need some additional positivity, and this needs to start from the top when the Monetary Policy Committee meets again in May.”

However, many Conservative politicians and City experts have warned that excessive caution is holding back economic recovery.

Rob Gill, Managing Director at Altura Mortgage Finance, told Newspage: “The first cut in the base rate seems set to come as soon as May.

“With the US Fed indicating three rate cuts this year, our weaker economy could see four delivered, taking the base rate down to 4.25 percent.”

Bob Singh, Founder at Chess Mortgages, suggested a base rate cut could bring a return of the brief mortgage price war seen at the beginning of this year.

He said: “Despite repeated calls for rate cuts from across the economy, and all manner of economic data deteriorating, the Bank has still failed to cut.

“How bad does it have to get for the Bank of England to start chipping away at the base rate? The first cut could come as early as May, especially if inflation moves close to target before then.

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