Some positive news has emerged regarding the economy as early Spring marked an upturn in the number of mortgage applications being approved. The figures are encouraging as they come off the back of an extended period of below average lending for house purchases, viewed by the government as one of the mainstays of the British economy.
One of the problems with historical records is they sound grand but often end up obfuscating other historical records. The announcement by The Bank of England on 3rd November that interest rates were to rise by three-quarters-of-one-percent (0.75%) meant that this was the biggest single jump in rates for more than three decades, thirty three years to be precise. Whilst not ignoring the significance of this move, it could allow us to forget that this also brings to an end one of the longest periods of low interest rates in history.
In a slightly bizarre twist, as the Bank of England was announcing its recent interest rate increase of half-of-one-percent, it was also scrapping a key affordability test that lenders had to conduct to ensure borrowers could afford… an interest rate increase!
With prices rising across the board, the Bank of England has stepped in to try and cool the market announcing an increase in interest rates. The rise, which is the second in three months and the first back to back increase in almost two decades, means interest rates will increase from their current 0.25% to 0.5%.
Recent announcements regarding the increase in GDP and inflation both point towards another strong phase of recovery, but the headlines hide a slightly different story. GDP figures covering the second quarter of 2021 were incredibly positive, showing almost record growth in a single period of 4.8%. Inflation figures released around the same time and covering […]
With the inflation rate falling to 1.3% in December, down from 1.5% in November, will the new Governor at the Bank of England have to consider an interest rate cut as one of his first acts? The drop to 1.3% puts inflation 0.7% below the Bank’s target rate (2%) and is the lowest level it […]
In case you missed it, interest rates doubled earlier this month to their second lowest ever level… what a sentence. Expected for some time, this is the first of several ‘baby steps’ Governor Carney has been preparing us for, as The Bank of England seeks to balance spending, inflation and GDP growth. Commentators do not […]
The September meeting of the Bank of England’s Monetary Policy Committee gave the strongest signal yet that an increase in interest rates is getting closer. Whilst the September vote saw a majority remain in favour of keeping rates at its long term historic low of 0.25%, the 7-2 result belies the real situation. The statement […]