In its latest ‘Experti’, which examines the economy and the housing market, the lender says: “The next few weeks could provide an opportune time to lock into fixed term mortgage rates, close to the lows of the year.”
The statement is based on the belief that the Monetary Policy Committee (MPC) will cut interest rates this week. The lender believes the US Federal Reserve Board (FRB) will cut its rates and that the UK will follow. Experti says: “Should the US FRB reduce rates this week, there is a distinct probability that the Bank Of England's Monetary Policy Committee (MPC) will follow suit. This reflects concern that sterling might appreciate significantly if the MPC left rates unchanged following a US rate reduction. Such an appreciation would have an adverse impact on the UK manufacturing industry, at a time when demand in our US and Eurozone export markets appears to be slowing.”
The housing market boom is continuing, as shown by the 24% annual increase in the Nationwide house price index. The key driving forces behind house prices are personal income and interest rates and so it appears that the MPC is about to provide a further boost to the housing market, according to Bristol & West.
