Thoughts on Bank of England base rate?

IAMIAM

Will this continue to be at such a low rate, or does it rise rapidly given current circumstances? Thoughts please, as I was reading that rates could go negative - will this impact tracker mortgages more so than ever, meaning better deals for tracker customers...

John_

The expectation is that rates will stay low for a few years, and are likely to have another small cut in the next year.

Sibbers123

Who knows!

It all depends on inflation. If inflation starts to rise, then interest rates will have to follow suit to keep it in check. This is a possibility due to the fact the amount of QE that is taking place. In the near future interest rates will stay at an all time low but they will have to rise at some point.

If interest rates did rise, it would be pretty bad. A lot of credit (mortgages, car finance etc) will become more expensive over night. The low interest rates are the main reason for a buoyant property market, BTL landlords with highly geared portfolios. If interest rates rose to 5%, that would make BTL unfeasible and would be catastrophic for the property market so I can't see interest rates ever getting that high in the next 10-20 years.

Thrugelmir

A negative base rate is a cost to banks.  As means that overnight money deposited with the BOE is charged interest.  Given the broader economic climate commercial lending rates are more likely to rise than fall. Until the fog clears the extent of defaults and bad debts cannot be quantified.