Just a reminder that the Bank of England’s Monetary Policy Committee meets tomorrow to vote on whether to move Bank Rate. Their decision will be announced at midday on Thursday 2nd August.
Yesterday, the futures market were calling a 91% probability that Bank Rate would move up. If it does, it won’t take lenders long to adjust their pricing, particularly those who have spent the last year absorbing costs instead of passing them onto borrowers.
Just because a rise looks increasingly likely, doesn’t mean it will actually happen. We were in a similar situation in May. Back then the probability sat at 65% but still nothing happened.
On Wednesday, the Committee will have to factor in:
- The possibility of a no-deal Brexit and maybe even a General Election if the Government collapses,
- The fact that the UK Consumer Price Index remained at 2.4% in June (below expectations of a rise to 2.6%)
- The price of oil
- Inconsistent UK economic conditions
To hold or to raise. I couldn’t call it but if you are thinking of remortgaging, starting the process this week might be a good move. If you wait until next week and the Bank Rate does rise on Thursday, many mortgage rates will be higher and you’ll be reworking your sums and cash flow projections.
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