A senior figure at the Bank of England is warning that base rate could rise to 2.0 per cent or more within the next year.
Such a rise is neither “unlikely” nor “implausible” according to a member of the Bank’s Monetary Policy Committee, Michael Saunders.
He has told an audience at a debate organised by the Resolution Foundation think-tank: “The precise path of future monetary policy is, of course, inherently uncertain, because it will depend on future economic developments that cannot yet be foreseen. But I note that the BoE market participants’ survey and the Treasury’s survey of external forecasters both suggest that Bank Rate will rise to around 2.0 per cent in the next year.
“Market pricing is even higher. Neither the external consensus nor the path of inflation break-evens implies that such a rate path will leave inflation below target over time. Without wishing to endorse those views too strongly, I do not regard such an outcome – that is, that Bank Rate will have to rise to 2.0 per cent or higher during the next year to return inflation to target – as implausible or unlikely.”
He adds: “But, rather than focus on a precise forecast for Bank Rate over the next year, the key point is that the tightening cycle may, in my view, still have some way to go.”
There’s been a large month-on-month increase in the cost of typical buy to let fixed rate mortgages popular with landlords, thanks to rising interest rates
Online brokerage Property Master claims that compared with June, just last month, landlords are now paying up to £59 more per month, including fees, for a typical five-year fixed rate mortgage. This is an increase of £174 per month since the start of the year.
Saunders voted for a half-point base rate rise at the most recent June meeting of the Monetary Policy Committee, although he was out-voted and the decision was to instead increase by a quarter of a point.
He says: “My own view is that further monetary tightening is likely, and indeed, as evident from my votes at the MPC’s recent policy meetings, my preference has been to tighten relatively quickly.
“This partly reflects my view that risks are tilted on the side of a more persistent period of excess demand and domestic inflation pressures than implied by the most recent monetary policy report forecast, published in early May. Despite the inflation-induced erosion of real incomes, I put more emphasis on risks that the backlog of unmet hiring needs and low labour supply will keep the labour market very tight. In turn, I expect that spending will be underpinned by low unemployment, the household and corporate savings accumulated during the pandemic, and the fiscal support measures announced in recent months.
“Moreover, unless restrained by tighter monetary policy, the relatively high level of longer-term inflation expectations implies that domestic cost growth and firms’ pricing strategies may remain above target-consistent rates even if capacity pressures ease to more normal levels.”
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The only way is up… hyper inflation here we come
I suppose this is what they meant by levelling up ?
All mine are on a fix and it ends in a few years when they are paid off.... then if EPC C stays put, I will sell the lot 💰💰💰.
INTEREST RATES AT 2.0% ARE NOT THE PROBLEM.
THE UNFAIR TAX OF SECTION 24 IS THE ISSUE.
IT NEEDS TO BE AXED NOW, OR LANDLORDS WILL LEAVE THIS MARKET IN DROVES
100% Andy. This has been a ticking time bomb waiting to go off!!
Why not reverse Section 24 so that it applies to all Companies & Corporate Bodies and remove it from Private Landlords, now wouldn’t that be fairer, when they want a fairer renting system, and didn’t Private Landlords build this letting Sector and not one of those Companies in to be seen.
Why not see how they like it they are all so smart while we are being sold down the river. Change of P,M, what a waste of time that is, we might as well have kept Mr Johnson lies, warts, bluster & all, now that we can see the alternative. At least he don’t one good deed before he went, sacked Michael Gove I’d shake his hand for that, the stupid Architect of the White Paper he’d need to learn the definition of fairer.
Gove was just applying the policies laid down by Johnson, or at least Johnson s backers. Their are lots of good conservative MPs, why didn't they stand ?
Edwin, fair enough if they were Policy’s but there are not Its a blatant discriminatory open ended attack from several angles, legally, illegally and financially to destroy us a law
law abiding section of its citizens that house millions and millions of People off their own backs, contribute billions to the Revenue and every other aspect of the economy, with their own finance hard work and dedication, then they stoop so low they are prepared to change the law specifically to destroy us and for no other reason, so unjust and want to call it fairer.
Micheal, l agree entirely, unfortunately nearly all conservative policies, and Blair, have been a shakedown ! It's basically a shift of wealth to the ultra rich !
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