UK interest rates increased to 5% NM

gil13

Good for savers not so go for borrowers.

Burnley_Lad

I'm really pleased with the 3-year fixed rate mortgage I got back in August now....

What annoys me though is that banks never pass on the full 0.25% increase to savers immediately.

gil13

A number of people on threads were asking about predictions about the future path of interest rates, many of the finance journalists are guessing like the rest of us. I like to keep an eye on what the BOE are actually saying/indicating and you may wish to keep an eye on this.
Check that latest inflation report here from August.

http://www.bankofengland.co.uk/publications/inflationreport/ir06aug5.pdf

Seems to me that within a fairly narrow range and based on probability the interest rates will be 0.5% above or below where they are now over the medium term. Indeed, if energy bills come down as reported then this could well help bring back CPI to allow for some loosening end of next year.

I am not sure how much effect the BOE can have on the housing market, ideally it will moderate by it's own accord, but with banks lending higher multiples and demand outstripping supply it may well continue upward. Perhaps this is what many people are thinking hence the continued confidence.

I guess what we all want is a nice balance around these sort of rate levels, savers have something to go with, mortagages are managable just about, and CPI can be brought back to target. That would be win/win.