Two weeks back, James blogged about the general concensus among economists and financial journalists that the Bank of England will raise its base rate fairly soon. The base rate is what it costs for banks to borrow from the Bank of England, so rising base rate affects lenders’ rates too.

This week, it looks like there is some confusion among commentators. Most of base-rate change speculation has been been based on hints and suggestions from the Bank’s governor Mark Carney. And he now seems to be suggesting that an imminent rise is less likely. And if they do push the rate up, it will be “limited and gradual.”

So, it seems that the immediate less likely to happen immediately. But we’re not sure. Nobody is completely sure.

Chris Williams of Wealth Horizons said:

“Despite its protestations, the Bank of England has significantly overestimated the level of clarity that the market and consumers have on its strategy around interest rates.”

Well, quite.

If base rates remain low, then people might be tempted to stay on variable-rate mortgages such as SVRs (Standard Variable Rate) and trackers. But this is risky. Our advice?

Shop around, and make sure you’re in a good position for when the Bank makes up its mind. For many folk, it’s actually a better idea to fix your rates.

If you’re in doubt, get in touch, and we’ll go through your own financial particulars together.

Posted in Market Watch, Remortgaging