The Bank of England cut interest rates to a new record low of 1% on Thursday. While the Halifax reported that house prices rose 1.9% during January. This is in contrast with Nationwide’s figures last week which showed 1.3% drop in house prices. As the credit-crunch has shown, the supply of finance has driven up house prices. There will be no full scale recovery in the UK property market until finance becomes easier to obtain, especially for first-time buyers. And with rising unemployment, who knows what the future will bring!
Posts Tagged ‘Rate increase’
Base rate falls while house prices rise
Friday, February 6th, 2009City predicts imminent base rate rise
Thursday, June 12th, 2008The City is betting on the previously unthinkable prospect of interest rates rising within months. Investors are gambling that rates will have to increase from the current level of 5% to bring inflation under control. Most had previously expected rates to fall to about 4.5% by the end of the year. Investors now fear that at least two, and possibly even three, quarter-point base rate increases are on the cards. City economists said that at the very best all hopes of an interest rate cut this year are now out the window.
