Interest rate increase due in early 2018????
Are we going to see an interest rate rise in 2018?
The National Institute of Economic and Social Research has changed its thoughts on when it believes an interest rate rise will be upon us. Their calculations have suggested it will now be quarter 1 of 2018 rather than their initial statement of Q2 2019.
If they are correct it will be the first time that we have seen it go up in almost 11 years.
They said “the increase rate increase should not be seen as a tightening in policy, but instead as a modest withdrawal of some of the additional stimulus that was injected into the economy after the 2016 EU referendum”.
They then went on to add “Developments in the labour market remain puzzling. The employment rate has risen to a record high of 74.9% in the three months to May 2017, the unemployment rate has dropped to 4.5%, the lowest since 1975, yet wage growth remains muted. Average weekly earnings adjusted for inflation dropped by 0.7% in the three months to May compared to the same period last year.
“Our forecasts are conditioned on a return to meaningful productivity growth from 2018 onwards. Failure of such growth to materialise presents a downside risk to our forecast.”
All of this is still guesswork and everyone will have a different opinion on whether their prediction will come true. However, if you are concerned about an interest rate rise and how this could impact you and your own monthly payments, please leave your details at www.openmortgages.finance. This is especially important if you are still sitting on your own lenders standard variable rate (SVR).