The decision to keep interest rates at 0.5% has looked increasingly likely in recent weeks, despite the earlier strong signals from the Bank of England that May would see a rate rise.
Over the past two weeks, the market has adjusted to this outlook. 3 month LIBOR now stands at 0.673%, down from a recent peak of 0.758% two weeks ago when markets wrongly thought a May rate rise was inevitable.
We’ve also seen year swap rates (or 12 month Libor) increase slightly and 2 and 5 year SWAP rates decrease, signalling that the market expects rates to remain low and we may not even see a modest rate rise this year.
Despite all the earlier warnings from the BoE that rates would rise, lenders are offering great deals and increases announced so far have been modest – ranging from 0.01% to 0.1%. Decisions about your mortgage should always be taken with a long-term view and our advice to those looking for a new mortgage or renewing their existing lending remains the same. If you’re concerned about rises in interest rates affecting your repayments, then now is an excellent time to fix.
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Notes for Editors
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