Prospective buyers likely to be hit by interest rate freeze

05 2008
The chances of would-be buyers obtaining an affordable mortgage and making a move out of the rental property sector will remain equally as slim after Thursday's meeting of the monetary policy committee, most economic forecasters suggest.

Even though many consumers have been calling on the Bank of England to cut the base rate of interest, all of the observers questioned in a poll carried out by Adfero expressed confidence that the rate will remain at five per cent for some time yet.

Howard Archer, UK chief economist at Global Insight, commented: "I think the most likely decision will be to keep interest rates unchanged this Thursday.

"They've got a difficult balancing act in terms of the economy could be in recession but at the same time elevated price pressures."

Likewise, the Centre for Economic and Business Research (CEBR) has also forecast that the Bank of England as well as the European Central Bank will hold interest rates, meaning the declining number of mortgage products available on the market will remain out of the reach of many first-time buyers, making renting the best option.ADNFCR-1219-ID-18716813-ADNFCR

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