Bousfield’s Blog

Over the last 12 months we have seen lots of rumours floating about regarding the future of the economy, interest rates and mortgages.  Earlier in the year the markets were predicting a July interest rate rise but of course July has been and gone with no rise made nor one on the horizon.

I like to keep up to date with what is going on as far as interest rates go and can recommend subscribing to www.thisismoney.co.uk for information on such.  I obviously do not want you to go there for your mortgage and insurance advice, that’s my job!  However it does no harm to make informed decisions when it comes to your financial future.

I also follow various people on twitter, which I find a useful tool.  I’m not particularly interested in what Joey Barton has had for breakfast so I don’t follow him, @thisismoney @mortgagestrat and @mortgagesols are all good sources of market information.

My feelings are that the Bank of England will find it very difficult to raise interest rates in 2012.  I think a rise will seriously hurt the general public as we are already suffering with rising costs elsewhere and that has been the case for the last couple of years really.  Mervyn King, governor of the Bank of England, has said that he feels inflation will start coming down in 2012 and once it is back to 2% or nearby he will probably be feeling a little better.  If wage inflation starts to hit then that is when a rate rise will become more likely but with unemployment rising and the Eurozone in crisis along with a prediction in some quarters of a double dip recession then I just can’t see it.

What this means for the mortgage market is that consumers are going to be able to access lower rates for longer, which if you are borrowing has got to be good news.  I’ve seen rates available to consumers coming down gradually over the last year and although they can’t realistically get much lower they can stay low for longer.  If you can afford it and it is right for you then it really is not a bad time to borrow.

You can follow me @rsbmoney

Richard