INTEREST rates can have a huge impact on your mortgage repayment, but how do we know if they’re going to change any time soon?
Rates have been at 0.5 per cent since March 2009 but the market is expecting to see a small rise early next year, although some commentators think it could be as early as the end of 2014, as the Bank of England may not want to raise rates close to a general election, scheduled for May 2015.
Mark Carney, Bank of England Governor said: “With many of the conditions for the economy to normalise now met, the point at which interest rates also begin to normalise is getting closer.
“While there is always uncertainty about the future, you can expect interest rates to begin to increase.”
Mark Carney has also suggested the “new normal” for interest rates is likely to be about 2.5 per cent when rates start to increase, as opposed to the historical average of around 5 per cent.