Time To Remortgage? Interest Rates May Rise To 5%

The inflation figures released today could have an effect the Bank of England’s thinking on the next interest rate decision.

Inflation did actually go down to 10.1% in March from February’s 10.4%, but most economists had expected this to drop to 9.8% by now.

Matthew Ryan, from global financial services firm Ebury, said: “We believe that this morning’s data has mixed implications.

“On the one hand, sticky inflation raises the possibility that the UK economy could tip into a technical recession in 2023.

“On the other, it more or less guarantees that the Bank of England still has a little way to go in raising interest rates.

“We see another 25bp hike at the May MPC meeting as a foregone conclusion, and we wouldn’t be at all surprised to see another couple more hikes beyond next month’s meeting.”

The MPC is the Bank of England’s Monetary Policy Committee – which sets the Bank rate, the UK’s base interest rate.

“This is ultimately likely to be bullish for the pound, and we continue to see plenty of room for more upside in the UK currency,” Mr Ryan added.

Whilst many didn’t expect any further rate rises this year, the inflation news has made many markets and investors rethink their forecasts.

Mortgages

With even further rate rises on the horizon, it will be imperative that you lock in a new deal at the lowest possible rates as soon as you can to ensure affordability and profitability, even if you still have time to run on your existing deal.

We work with a fantastic mortgage broker who will be able to help you assess your options and hopefully save you thousands.

If you’d like me to make an introduction, please let me know and I will make the arrangements.