Banks and building societies look set to cut the costs of UK fixed-rate mortgages in the short- to medium-term after the International Monetary Fund (IMF) predicted that ultra-low interest rates will soon return with inflation due to fall sharply in the coming months.
A number of homeowners have been hit hard by a steep increase in mortgage costs in recent months. But the United Nations financial agency says that the combination of an ageing population and low productivity is set to rein in inflation and take interest rates back to pre-Covid levels.
The IMF said that skyrocketing inflation, currently at a four-decade high in Britain, is only a hiccup in the overall trend for low interest rates, rather than a permanent change to the global financial landscape, the IMF said.
“Recent increases in real interest rates are likely to be temporary. When inflation is brought back under control, advanced economies’ central banks are likely to ease monetary policy and bring real interest rates back towards pre-pandemic levels,” a report by IMF economists said.
The so-called “natural” rates of interest, an anchor for monetary policy that neither stimulates nor discourages economic activity, “will remain low in advanced economies or decline further in emerging markets,” the report concluded.
The chancellor has announced the budget for 2023. The UK will now not enter a technical recession this year, say independent forecasters the Office for Budget Responsibility (OBR). Inflation will more than halve and reduce to 2.9% by the end of the year, the OBR expects. Parents - working 16 hours a week - of children aged nine months to five years will get 15...
Newsflash: UK inflation slowed to an annual rate of 10.1% in January, according to the Office for National Statistics’ consumer prices index. That indicates prices across the economy did not rise as quickly as expected in January after a 10.5% reading in December. Economists had predicted a rate of 10.3%.
Demand for homes rebounded in the first weeks of January but the start of 2023 is a slow burn with buyers waiting to see what happens next.The demand for homes rebounded in the first few weeks of January in line with pre-pandemic levels but it seems that the start of 2023 is more of a slow burn with wannabe buyers waiting to see if prices and mortgage rates fall, says Zoopla....
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