Carney predicts interest rates to reach 2.5pc by 2017

By Michelle Rock

Mark Carney predicts interest rates will reach 2.5 per cent by 2017, and has hinted that they will stay at that level for some time.

The Bank of England governor suggested that interest rates would not reach the 5 per cent level that had become normal prior to the recession. Mr Carney again reiterated that changes to interest rates would be "gradual and limited", saying the impact on household spending would make it very difficult for rates to increase above 2. 5 per cent.

Despite effectively suggesting that interest rates will not increase by much more than 2 per cent in the near future, mortgage Lenders have been issued guidance that new loan applications should be assessed for affordability on the basis of a potential 3 per cent increase in interest rates over the next 5 years.

The rhetoric from the Bank of England in the past weeks seems very much aimed at preparing mortgage borrowers for an imminent rise in interest rates, with talk moving from 'when' an increase will happen to projections of how they will be increased over the next couple of years.

If you are buying, selling or remortgaging a property in Northern Ireland, and want to speak to a conveyancing solicitor in Belfast, contact Wilson Nesbitt by calling 0800 840 9290.  




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