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Economic Headwinds

Written by Sam Jones on 30 October 2014.

Both of these factors are ready to rock the booming UK economy in the next six months as we head to an election.

Chancellor George Osborne has warned the UK economy could be facing troubles in the next few months.

We see this as great news for those enjoying low mortgage rates as the Bank keeps its base rate lower for longer.

However, it could spell trouble for a rocky housing market that is potentially reaching its peak price.

In addition there are growing concerns about deflation, meaning prices are falling year on year.

Deflation shows consumers think prices will be cheaper tomorrow so don’t spend while business think investment will be worth less tomorrow so don’t invest.

It is catastrophic for an economy and some believe it to be worse than hyper-inflation as it sucks all demand.

This could spell trouble for the housing market as money is hoarded in property and owners become scared to sell.

There are big concerns facing the fundamentals of investing in housing but owning your own pad is still the aim for many Brits.

In a turbulent financial world it is best to speak to an adviser and get the best deal for your needs and the best rates.

 

 

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