Mortgages. Loans. Credit cards. Are you ready for a rate rise this summer?
There a clear signs that traders in the City are expecting interest
rates to rise by 0.5% by December this year. The Bank of England tends to make a series of small interest rate changes rather than one big change, ( life insurance quotes ) so watch out for the first 0.25% rise around August.
Mortgage rates are already beginning to react with the rates for two and three year fixed rate mortgages rising. The rates on loans and credit cards are generally variable, so these aren't likely to rise until the Bank of England moves.
It's all because inflation is coming under pressure. The target for inflation is 2% per annum but with energy ( insurance ) prices high, and likely to soar even further, we are beginning to see the knock on effect on prices of goods and services across the economy. And despite fuel bills siphoning money from the man in the street, new car registrations are up 7% in the year to March, industrial orders rose more than 13% and business confidence improved again last month (April). Even America the economy is experiencing surprising levels of activity.
All this is good news for Britain's economy. The annual rate of exports has risen almost 20% virtually ( best mortgages ) matched by imports. The major quarterly survey of the economy suggests that growth will remain strong.
Click here for page 2
|