An Armagh estate agent has said Thursday’s interest rate rise may have been minimal but the “trend is significant”.
Art O’Hagan, of CPS Property, spoke to Armagh I after the Bank of England raised interest rates for only the second time in the last decade.
In a move that many saw coming, the bank’s Monetary Policy Committee voted to raise the Bank Rate to 0.75%.
This leaves interest rates at their highest level since February 2009 when they were cut by half to 0.5%.
Back in August 2016, the bank had cut the base rate to 0.25% before raising it to 0.5% in November of last year.
During the meeting, the MPC agreed that the first quarter was temporary, with momentum recovering in the second quarter.
The Bank of England expects that the GDP will grow at an average rate of 1.75% per year which they conceded although “modest by historical standards”, it is faster than the current rate which averages around 1.5% per year.
The MPC has stated that at present the UK economy “currently has a very limited degree of slack”.
Inflation rose to 2.4% in June above the Bank of England’s target of 2% – which they forecast to get back to by 2020.
The MPC has said it “continues to recognise that the economic outlook could be influenced significantly by the response of households, businesses and financial markets to developments related to the process of EU withdrawal”.
This is expected to increase the interest costs of more than three-and-a-half million residential mortgages with either variable or tracker rates.
However, it will be welcomed news for savers, who could see a lift in their interest rates over the coming months.
Armagh I spoke with Art O’Hagan, Managing Director of CPS Property Consultants, about what this means for mortgage owners.
He stated: “The interest rate change in minimal but the trend is significant.
“This will only have an impact on larger mortgages but the banks need to earn money and it is essential to always speak to a qualified mortgage broker when assessing your particular mortgage requirements.
“This protects your own personal long-term interests. Fixed rates are still very compatible.”
Help concerning mortgage options can be explored via the CPS website.