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CBI calls the Summer for rate increase

February 5, 2010 Mortgages No Comments

The CBI has reported that it sees a small interest rate rise this summer.

Yesterday the Bank of England kept rates on hold and the CBI chief economic adviser, Ian McCafferty, CBI commented that “The economy is stabilising but still faces some serious headwinds, and recovery remains shallow-rooted. However, near-zero interest rates, the existing £200 billion QE package and the sharp fall in Sterling are already extremely expansionary, and inflation has exceeded expectations consistently in recent months.

“As the economy recovers the bank will have to start to think about returning monetary conditions towards more normal levels. We would expect this to lead to a small rise in interest rates around the middle of this year.”      

Mortgage brokers at Capital Fortune have predicted rates to increase late Q2 early Q3.

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