Interest rate increase tied to unemployment drop

By Christine Farrell

Interest rates will not increase until unemployment falls to 7 per cent says Bank of England governor Mark Carney.

It is has been widely considered that interest rates would not increase anytime soon, but Mr Carney's pledge will act as a strong reassurance to home owners and business owners. The rate of unemployment in the UK is currently 7.8 per cent, and it is estimated that 750,000 new jobs would need to be created for the rate to fall to 7 per cent.

Mr Carney said he made the comments to provide "extra clarity .. to avoid unnecessary fears that interest rates would rise after recent positive economic news". He did however add that the rates could go up before unemployment drops to 7 per cent, if inflation levels start to rise too fast or there is another significant threat to financial stability.

Home owners in Northern Ireland and the rest of the UK have benefitted from the frozen 0.5 per cent interest rate, as it has given many the opportunity to stay on top of their monthly mortgage payments despite salary cuts or freezes. For others, it has been a chance to overpay on their mortgage in order to increase their equity interest in their property.

If you are buying a property in Northern Ireland, or selling or remortgaging an existing home, contact one of the property solicitors at Wilson Nesbitt for advice on the conveyancing process by calling 0800 840 9290.