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MI POLL: 39 per cent predict held rates to H2

Sarah Davidson

April 7, 2011

Just 4% of our readers were proved wrong today after saying they thought the Bank of England would increase the base rate in April.

A fifth of you said you think rates will rise next month however. A further 6% voted for a June rise, and 8% of you said we’d see movement upwards in July.

A significant number of you – 23% – don’t think the Monetary Policy Committee will raise rates until next year.

The economic experts were hedging their bets this afternoon as inflation and GDP growth statistics made the likely path for interest rates much harder to forecast.

Ian McCafferty, CBI chief economic adviser, said: “With inflation edging upwards, and additional cost pressures in the pipeline, questions over the underlying pace of growth leave the Bank of England in an unenviable position. Not surprisingly, they’ve elected to wait until things become a little clearer before setting their course towards any rises.

“There are conflicting messages about the low level of consumer confidence versus brighter prospects for certain sectors, which continue to cloud the issue. No doubt the MPC is waiting for further signs that the recovery is back on track before changing its stance.”

But property professionals said the uncertainty presented a good opportunity for advisers.

Simon Gammon, head of Knight Frank Finance, said: “The European Central Bank is now talking about increasing rates and it’s only a matter of time before the MPC pushes them up here.

“Longer-term fixed rates are already rising and the best rates may not be available for much longer. Borrowers need to consider carefully how much future risk they are prepared to expose themselves to. Now is absolutely the time to take expert advice.”


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