Interest Rate Hike
The Bank of England have risen the interest rate this afternoon. Simon English, Senior City Correspondent for the Evening Standard says that this is good news. However he has warned that this is being done because they are worried about inflation. Moreover Simon says that rates should have been put up ages ago. The economy has needed rates increased for quite some time.
Furthermore Simon tells us that the market worry is overdone. The concern that raised interest rates will stop people from being able to pay their mortgage is wrong. The rate rise equates to £30 a month and this is only for those on variable rate mortgage. However the vast majority of people aren’t on variable rate mortgages.
Where do rates stop? Is this the first of many or the first of few? Simon suggests that it could well be the first of few. They will be definite in saying it will be first of not very many. Simon tell’s us that the City expectation isn’t always right. However in this case the city expects this will be the new normal for what interest rate will be for the foreseeable future. Simon signs off by telling us that interest rates will be 2% but this will not happen for a couple of years at the very least.
You can see more from Simon English on Core Finance by using this link: http://www.corelondon.tv/?s=simon+english