Habito: Don’t expect a rate drop this Thursday
Ahead of the Bank of England interest rates announcement on Thursday online mortgage broker Habito has claimed that the chance of a rate drop now look increasingly less likely.
There has been increasing speculation of late that interest rates are set to drop following comments from three members of the Bank of England’s Monetary Policy Committee (MPC).
Governor Mark Carney previously said that interest rates could be cut if economic performance was weak. Additionally, both Gertjan Vlieghe and Silvana Tenreyro suggested that they could vote for a cut.
The last meeting of the MPC saw members vote 7-2 in favour of keeping rates at 0.75%.
But Martijn van der Heijden, chief strategy officer at Habito, believes a change has now become unlikely.
He said: “Noises of a coming reduction to The Bank of England’s base rate seem to have been reduced to a murmur over the last few days, thanks to a stronger than expected jobs market and a more positive picture for wage/inflation rates.
“Any future rate change may all come down to the impact of Brexit – something that the Bank may not want to pre-empt. Instead, it’s looking more likely it’ll opt for a wait and see approach this Thursday.
“With rates being so low for so long, borrowers have benefited from cheap mortgage deals for several years. But when picking a mortgage deal, the key thing to look at is “true cost” – this includes all the hidden extras added in like product fees, as well as any freebies, such as free legals or cashback.
“With an array of different deals to be had on mortgages, there’s never been a more important time to seek free, whole-of-market mortgage advice.”