Two thirds (66%) of brokers expect the Bank of England to hold its base interest rate at 0.5% until 2014 or later.
The new survey of brokers, carried out by specialist lender United Trust Bank, revealed that a third of brokers (33%) expect interest rates to increase in 2014 whilst 22 per cent believe rates will remain unchanged until 2015. 12 per cent expect rates to increase in 2016 or later and 8 per cent predict the rate will come down further before it goes up again.
The survey also asked brokers when they expected sentiment about the UK economy to turn from ‘gloomy’ to ‘bright’. An optimistic 14 per cent expect sentiment in the economy to pick up next year whilst 38 per cent expect the turnaround to come in 2014. 35 per cent expect the outlook to remain gloomy until 2015 and 8 per cent expect the negative sentiment to continue until 2016 or later. Just 3 per cent of brokers said they wouldn’t describe the current sentiment as ‘gloomy’.
Commenting on the research findings Harley Kagan, Managing Director of United Trust Bank, said;
“The Bank of England has held its base rate at 0.5% for an unprecedented 43 consecutive months and according to the majority of the broker community we’re unlikely to see a change for at least another year.
Under the leadership of new Governor Mark Carney it is expected that the MPC will continue with its low interest rate policy. Borrowers will no doubt hope that when he takes over the role in June 2013 he steers a similar course to his predecessor, whilst savers would welcome their nest eggs working a little harder.”