Due to the recent problems in the US will the Bank of England raise the interest rate?
Posted on 4 October 2007
What is the feeling regarding the bank of England interest rate, is it expected to rise over the coming 6 months due to US problems and the fact the government will want us to save? I am currently considering a tracker. Please help.
Hi,
No, in fact it might even go down quicker as a result of the US sub-prime problems: the Bank of England doesn't want to make it any more difficult for lenders to borrow money now.
A tracker is a good idea for anyone who thinks rates have peaked, and I advise that you move quickly if you want one, because one effect that this credit crunch is going to have may be that lenders restrict the generous size of their discounts. Whilst the money they buy in is priced high, they will make it up by passing less of a discount on to borrowers.
Katie
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