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Bank rates

Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
I know one can't be sure of anything but does anyone have an 'informed' opinion as to how bank rates will change over the next few years?

If there are loads of redundancies and government cuts, although we will experience inflation for, say, wheat and cotton products because of the emerging economies competing, will rates need to stay relatively low to keep general inflation down?

I'm toying with the idea of getting myself a small flat ... but don't want to be locked into a fixed term mortgage for 3 or 5 years at nearly 5%. Worth a gamble for two or three years at a variable set just above the base rate? :)


  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Hey there Teagan,

    I noticed this was posted over a week ago and you've not had any replies.

    If you are still looking for some information thisismoney.co.uk has some interesting discussions and it is updated daily!

    To be honest this topic is way over my head, but I've just skim read the article and there are views from Economists, facts and figures and links to other sites.

    Hopefully it will you give you some ideas and maybe you could join the discussion on that site?

    I hope this helps!

  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Nobody here can really give you advice, you should really go and get some professional advice from an IFA. To give advice you have to be accredited through the FSA so it does get difficult.

    As a money adviser, my professional advice is normally to budget for a worst case scenario and take it from there. If getting a tracker would be a "gamble" because you couldn't afford it if rates went up to 7% then it's a really really bad move, but if you could still afford it at high rates of interest then you should be OK. YOu need to think far more about affordability than whether a bank will lend you the money; although they're a lot stricter now, a bank giving you the money still doesn't mean that you can afford it.

    FWIW I think rates will be back up to around 3-4% in the next 24 months, and I think there will be a lot of people feeling a lot of pain when that happens.
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