Interest Rates on Hold For Another Year

The Bank of England has just announced that interest rates will remain on hold for at least another year.

Following its February Inflation Report, Governor Mark Carney has indicated that the current 0.5% historic low rate will be sustained throughout 2014 despite forecasting strong economic growth of 3.4% this year.

Speaking in an interview with the Guardian, Mr Carney announces that although Britain has one of the strongest economies in the world our recovery is still too fragile to cope with a rise in interest rates.

The announcement comes as good news for home owners struggling with mortgage repayments and looks sets to give a boost to the housing market in time for the spring boom.

Mr Carney described Britain's recovery as 'neither balanced nor sustainable' when he delivered the bank's quarterly inflation report.  He said "Activity is still below its pre-crisis level and the household saving rate is likely to fall further".

The report suggested that the bank rate may need to remain at low levels for some time to come due to a lack of inflationary pressure, spare capacity and 'headwinds' at home and abroad. 

Seeking to reassure worried households and businesses alike, the Bank's Monetary Policy Committee was keen to stress that when rates do eventually go up this will happen gradually and would settle at around 2 – 3% rather than the pre-crisis figure of 5%.

According to a survey by the bank, uncertainty about interest rates has fallen leading to three quarters of businesses saying this has boosted their confidence.

If you need to speak to a solicitor about buying or selling a property please call our Preston conveyancers on 01772 882 888 or email info@ellencourt.com.

Ellen Court Solicitors

Preston Conveyancers

Tel: 01772 882 888