A look back at base rate over the last 20 years
The Bank of England Official Rate or base rate over the last 20 years. In the chart below the first nine years shows what was a pretty normal range for base rate which averaged 4.95% over the period to Oct 2008. Since March 2009 rates have remained very low with only four changes to it over this period.
If you have taken out a mortgage or remortgaged over the last 10 years you would be forgiven to think rates were always this low!!
What next for interest rates?
That depends on Brexit, the economy and inflation.
The Bank of Englands role is to control inflation and they have a target of 2% and the Bank of England official rate will be changed to keep inflation at or close to this target rate. However they also have to take other economic factors into account.
In the latest monetary policy committee inflation report the bank that it would restrict the pace of interest rate rises over the next two years to no more than 0.25% due to Brexit uncertainty and a slowing economy. However Mark Carney the Bank of England Governor also warned that a modest recovery to the economy over the next 3 years will warrant higher interest rates.
If your mortgage rate is ending soon then considering a fixed rate is worth considering. If you would like to review your options get in touch with David for a free mortgage review.
David can be contacted on 01224 784030 or by email on firstname.lastname@example.org
Chart Data supplied by Bank of England