Two interest rate rises predicted for 2018

By Lauren Burns

Forecasting body EY Item Club has predicted that interest rates will increase twice this year, and twice again in 2019.

The governor of the Bank of England, Mark Carney has said that an interest rate rise is "likely" in 2018, though did say that any increases would be gradual. The current interest rate is 0.5 per cent, and the Monetary Policy Committee is due to vote again in May. A number of economists have predicted that they will vote to increase interest rates by 0.25 per cent, as they did in November of last year.

Many of the major mortgage lenders have reacted to the increased speculation of an interest rate rise by increasing prices on their most popular mortgage deals. The average mortgage rate has gone up by 0.25 percentage points in the last month

The speculation has led to an increase in the number of homeowners making enquiries about switching their mortgage to a fixed rate product before any future increases are implemented.

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