Don’t expect an interest rate rise until 2016, says HSBC
The Bank of England may not increase the base rate until at least 2016 according to analysts at HSBC.
Limited economic growth across the eurozone and doubts about the UK's ability to cope with an interest rate rise are still big issues for the BoE's Monetary Policy Committee.
They have certainly contributed to HSBC pushing back its forecast for a base rate increase by one year: from the first quarter of 2015 to the first quarter of 2016.
Simon Wells, chief UK economist at HSBC, was quoted as saying: “The possibility of a referendum on EU membership could also be a huge source of uncertainty, which could weigh on UK business investment.”
The minutes from the latest Monetary Policy Committee meeting show that seven members voted in favour of keeping base rate at its record low of 0.5% while two voted against.
Aaron Strutt, product manager at Trinity Financial, says: "If the base rate does stay on hold for another year fixed and tracker rate mortgages are likely to get even cheaper. At the moment there are some incredibly good mortgages available to borrowers providing they have at least a 10% deposit."
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