Some 21% of brokers think the base rate will be increased by the end of 2017, according to a broker sentiment poll carried out by United Trust Bank.
However, a majority of 76% believe there’ll be no increase in 2017.
The results come following the revelation that the Bank of England’s Monetary Policy Committee (MPC) voted 6-2 in favour of keeping the Base Rate at 0.25%. The Base Rate has now been at 0.25% for a full year since being reduced shortly after the EU referendum.
When asked for their view on the outlook for the residential property market 26% of respondents indicated that their outlook was positive, 28% indicated that their outlook was neutral whilst 10% said their outlook was negative. The remainder didn’t express an opinion either way
Harley Kagan, group managing director of United Trust Bank, said: “The Bank of England has lowered its growth forecasts to 1.7% for this year and 1.6% for next year and inflation is currently running at 2.6%. Interest rate increases, when they come, are likely to be by small increments and over several months, if not years. Financial markets suggest a rise in interest rates will come only towards the third quarter of 2018.
“This is unwelcome news for savers but borrowers, be they businesses or individuals, will be relieved that the cost of credit is unlikely to increase drastically or suddenly. This should encourage SMEs to keep looking out for opportunities to invest and grow their businesses and developers to keep contributing to the many hundreds of thousands of new homes which the UK needs to build.
“With the uncertainty of Brexit adding to the complexity of challenges faced by the UK economy, Mr Carney will be mindful of doing anything which might stall an economy which is still very much finding its feet 10 years on from the start of the credit crisis.”