We all know of course that there was never going to be any changes this month in the Bank of England Base Rate, nor in the amount Quantitative Easing, but there are still some interesting forces at play.

There are still some who believe there should be a further cut next year with a further increase in Q.E., whilst others believe that inflationary pressures, especially in commodity prices amongst other things, may mean that we soon see inflation rising faster than expected, which in turn raises the spectre of increased rates quicker than expected! It remains to be seen which group will be shouting “house” first.

In his Pre-Budget Report yesterday, which did not go down too well with many people apart from the Bingo Brigade, the Chancellor said that he still expects a rise in the economy in this final quarter, with inflation growing to around 3% before falling back again. Whilst many will take his actual figures with a massive dose of salt, I think the general trend is pretty much accepted. Economic data since the decision to increase the QE campaign to £200 billion has been largely positive.

What no-one knows, however, are the longer-term effects of the QE policy or the inevitable cost cutting exercise that has now been put off until after the next election, irresponsibly many might argue.

Whilst the number of mortgages granted to house buyers hit a 22-month high in October, according to the Council of Mortgage Lenders who said this was the highest number since December 2007 and up 43% from October last year, these levels are still low.

We are also still seeing house price gains, especially in London, and I do not see these prices falling again in the near future as supply really is just too low.

In terms of mortgage rates, a few lenders are already indulging in some seasonal festive cheer and reducing rates, especially where fixed rate products are concerned. This will be of help to those purchasing who need to budget carefully as they take advantage of lower prices, and those looking to remortgage who may have been waiting on their lenders variable rate for a good deal to come along, especially as we edge closer to the time that rates will have to start to rise.

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