Brokers expect low rates to remain

Brokers expect low rates to remain


The majority of intermediaries expect the Bank of England to maintain its base interest rate at 0.5 per cent until 2014 or later, according to United Trust Bank’s (UTB) latest broker survey.

The specialist lender’s findings revealed that 66 per cent of brokers predict that the Bank of England will hold the current base interest rate for years to come.

UTB’s survey also found that a third of brokers (33 per cent) expect interest rates to increase in 2014, though 22 per cent believe rates will remain unchanged until 2015. 

12 per cent of respondents did not expect rates to increase until 2016 or later, while 8 per cent foresee the base rate coming down before increasing any further.

The survey also asked brokers to estimate when they expected sentiments regarding the UK economy to turn from ‘gloomy’ to ‘bright’. 

14 per cent of brokers expect economic optimism to pick up next year, with 38 per cent expecting a turnaround to come in 2014. 

A pessimistic 35 per cent of respondents, however, expect the outlook to remain gloomy until 2015 and 8 per cent predict that a negative atmosphere will persist until 2016 or later. 

A mere 3 per cent of brokers said that they would not describe the current economic outlook as ‘gloomy’.

Discussing the survey’s findings, Harley Kagan, Managing Director of United Trust Bank, said: “The Bank of England has held its base rate at 0.5 per cent 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.

Harley added: “Under the leadership of new Governor Mark Carney, it is expected that the Monetary Policy Committee (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.”


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