Interest rate freeze continues but no hint on future

By Natasha Adamson

The Bank of England has voted to maintain the current interest rate freeze at 0.5 per cent for another month, but there was no further guidance or hint at when the rate may be increased.

When governor of the Bank, Mark Carney, moved to ease concerns over the future of interest rates last year, it was considered that he had held speculation of an increase in rates for a couple of years. Mr Carney had linked a change in the rate of interest to the rate of unemployment, saying it would have to fall to at least 7 per cent before an interest rate increase would be contemplated. The guidance successfully brought calm to mortgage borrowers and business owners alike, and there was assured talk that the 0.5 per cent rate would continue until 2016.

A larger than anticipated improvement in the UK economy resulted in a steady decline in the rate of unemployment, which has already fallen to 7.4 per cent, and is expected by many to reach the 7 per cent target before the end of the year. Most economists still believe that interest rates will remain unchanged until 2015, but some are not so sure, and it was hoped that the monthly vote of the Monetary Policy Committee would be accompanied by some further guidance on the future of interest rates. No such guidance was forthcoming which will result in at least another month of speculation as to just how soon interest rates will increase.

Mortgage borrowers have benefited well from the rate freeze, with home owners who bought at the height of the property boom in Northern Ireland in particular being able to take advantage to overpay on their monthly mortgage payments in order to work themselves out of their negative equity. Property owners are now watching with renewed interest as many contemplate whether the time is right to switch to a new mortgage to secure a low rate for the next few years.

If you remortgaging a house, or buying or selling a property in Northern Ireland, and need a conveyancing solicitor to handle the legal process for you, contact Wilson Nesbitt in Belfast by calling 0800 840 9290.

Or to read more about property conveyancing in Northern Ireland click here.