Speaking at the Financial Services Expo in Manchester Nationwide’s senior economic analyst, who is responsible for compiling the lenders house price index, warned that 67% of borrowers are “sensitive to a rate rise”.
But Silvestrin said that he expects the base rate to be increased steadily and predicted it would be May 2015 before it increases from the current historic low.
He said: “A lot of people are saying that as things are going well we should increase interest rates.
“However the Bank of England believes that there is still some capacity in the economy so it will keep rates at the current level of 0.5%.”
And in the long term Silvestrin expects interest rates to be at a much lower level than the historic average.
He said: “The interest rate will sit at between 3 and 3.5% but it will take some time to get to that level. Only expect a gradual increase.”
