Will Interest Rates Rise?
As Rightmove.co.uk announces the smallest rise in UK house prices since Feb 2009 at 0.2% we look back at The Bank of England’s interest rate forecast from March 2018.
A few months after this report Mark Carney (The Governor of the Bank of England) stated there would be further gradual and limited rate rises in the future.
Interest rate/Bank of England rate forecast 2018-23*
| Bank rate forecast % | |
| Q4 2018 | 0.8 |
| Q1 2019 | 0.9 |
| Q2 2019 | 1 |
| Q3 2019 | 1 |
| Q4 2019 | 1.1 |
| Q1 2020 | 1.2 |
| Q2 2020 | 1.2 |
| Q3 2020 | 1.3 |
| Q4 2020 | 1.3 |
| Q1 2021 | 1.4 |
| Q2 2021 | 1.4 |
| Q3 2021 | 1.4 |
| Q4 2021 | 1.5 |
| Q1 2022 | 1.5 |
| Q2 2022 | 1.5 |
| Q3 2022 | 1.5 |
| Q4 2022 | 1.5 |
| Q1 2023 | 1.5 |
Source: UK Office for Budget Responsibility, 27 March 2018
So it would appear there has been a delay in the expected rate increases with the current rate at 0.75%.
We put this mostly down to Brexit and not wanting to further stall the economy over the next few months.
But once Brexit is resolved will The Bank resume its plan for gradual increases?
With the majority of new mortgage borrowers taking fixed rates and either choosing 2 year or 5 year rates. It is now the right time to consider fixing for a longer period?