The Bank of England’s Monetary Policy Committee have indicated that the current base interest rate of 0.5% will remain until “well into next year”. This will reassure businesses, households and those looking to buy their first home as the cost of borrowing remains low.
Many experts are keeping one eye on inflation as the big indicator of potential monetary policy in the years to come. But the Bank of England’s quarterly outlook said that because of recent falls in oil and other commodities, “inflation is likely to remain lower than previously expected until late 2017”. The only clear thing to come out of several years of speculation surrounding interest rates, is that when they do increase, it will most likely be gradual. Some experts even suggest small incremental increases, as little as a quarter of a percent at a time.
With the Help to Buy ISA launched, more people are able to save for a deposit on a home, making it a good time for those looking to buy their dream property. With the base rate remaining low for the time being, it is still a good time to borrow, with many lenders still offering competitive rates across the board on a range of products.