21% of brokers believe that the Bank of England will increase the Base Rate by the end of the year, according to a United Trust Bank poll.
The results come following the Monetary Policy Committee’s latest meeting, in which it voted 6-2 in favour of keeping the Base Rate at 0.25%. The Base Rate has now been at 0.25% for a full year since being reduced shortly after the EU referendum.
In another question, brokers were asked for their view on the outlook for the UK residential property market. 26% of respondents said that their outlook was positive, 28% were neutral and 10% indicated that their outlook was negative.
Harley Kagan, Group Managing Director of United Trust Bank, commented: “The Bank of England has lowered its growth forecasts to 1.7% for this year and 1.6% for next year and inflation is currently running at 2.6%. Interest rate increases, when they come, are likely to be by small increments and over several months, if not years. Financial markets suggest a rise in interest rates will come only towards the third quarter of 2018.
“This is unwelcome news for savers but borrowers, be they businesses or individuals, will be relieved that the cost of credit is unlikely to increase drastically or suddenly. This should encourage SMEs to keep looking out for opportunities to invest and grow their businesses and developers to keep contributing to the many hundreds of thousands of new homes which the UK needs to build.
“With the uncertainty of Brexit adding to the complexity of challenges faced by the UK economy, Mr Carney will be mindful of doing anything which might stall an economy which is still very much finding its feet 10 years on from the start of the credit crisis.”