Interest rate cut looks unlikely |
13 2008 |
| It appears that mortgage borrowers will have to continue to endure high repayment rates. New Star has published research which suggests that the Bank of England's Monetary Policy Committee (MPC) is unlikely to cut the base rate of interest any time soon. That is bad news for homeowners and suggests that it makes economical sense to rent rather than buy, at least for the time being. The firm claims that inflation has unexpectedly shot up, spelling bad news for those who were hoping for a rate cut. According to New Star, factory gate prices jumped by 1.4 per cent in April, making them 7.5 per cent higher than one year ago. In addition, import prices surged by 1.9 per cent in March, taking them to 10.3 per cent higher than they were 12 months ago. Interest rates currently stand at five per cent but a high inter-bank lending rate has forced mortgage interest rates up and this is having a big impact on borrowers.  |
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