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Interest rate increases

Its widely anticipated that interest rates will start to rise this year, but how long do people think it will take to get to the 3% / 3.5% mark?

Asked on Mar 17 2011, Home Finance in London | Report content

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  • This isn’t an easy question to answer as there are so many different factors influencing the decision of the MPC each month. The general view from the market was that rate increases would begin in May/June and increase gradually over a 12 month period to reach somewhere in the region of 5 percent by June 2012. However as these predictions were made before the Japan earthquake and the escalation of the situation in Libya (and resultant spike in the oil price) it is likely that these predictions will need to be revised once the full economic consequences become clear. A good way to get a rough gauge of where the banks believe interest rates will go is to take a look at the rates being offered for 3 and 5 year fixed rates.

    Answered on Mar 22 2011, Report content
  • It will be hard to curb the inflation as it is spiralling out of control, but sharp rise in Base Rates will give sharp increase in mortgage defaults, lose of jobs/homes/lively hoods. Not good at all. Government should start doing something about lending as it will be very hard to sustain any sign of growth for years to come. I can not see the interest rates rising till end of 2012- beginning of 2013. Everyone is banking on Olympic Games - but how much will 12-16 days of joy bring? Lets speculate.....

    Answered on Apr 1 2011, Report content

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