Interest Rates on the Up??

As many of you are aware there is a great deal of speculation about which way interest rates will go? We know they wont be heading down, but the question is whether or not they will sit at the current level or push upwards.

As many of you are aware I am minded to believe at some point, probably in the next 12 months, interest rates will push up.

Data released today indicates this could be sooner rather than later. November inflation figures show inflation has risen to its highest level for 6 months. The consumer prices index rose to 1.9%, a big jump from the October figure of 1.5%. This is mainly down to the oil price. This has climbed significantly in the past few weeks before the recovery is really at full steam ahead.  You will have seen it at the pump with typical petrol prices at 108.9p per litre.

The Bank of England has a target of 2% for inflation and its main tool (frankly its only tool!) to control inflation is interest rates. If inflation pushes up further, the B.O.E. will have to review its policy and may make the decision to raise interest rates.

Clients need to be wary of this as it will increase the cost of loans, mortgages and credit card payments.

I will continue to advise further on this. It is therefore an ideal time to consider whether or not it is prudent to consider a switch to a fixed rate mortgage. So give us a call if you want to explore this area. Remember fixed rate mortgages wont suit all, depending on your personal circumstances, so advice is important. Give us a call now.