It would be easy to sit back and wave off the warnings of interest rate hikes.  In the past few years there were warnings that the Bank of England’s Monetary Policy Committee (MPC) would have no choice but to raise rates.  Once the housing market took off earlier this year, again there were threats about having to face rising interest rates.  But rates remained unchanged.  Yet, this time it appears the warnings are indeed going to have been correct – rates will rise.

Martin Weale, MPC member, spoke at the University of Hull and stated that the falling unemployment level and overall economic recovery should signal a need to increase the standard base interest rate.  He admitted that he will continue to vote for a rate hike and tightening of credit throughout the remainder of the year.  He also expressed little concern for taking into account the current reduction of inflation and stated that the dip in inflation should gain no more attention from the MPC when setting the interest rate than the periods prior when growing inflation was ignored.

Along with Ian McCafferty, Mr. Weale has voted for rate increases in recent MPC meetings.  Both have called for a 0.25% increase to the current historical low level of 0.5% which has gone unchanged since March 2009.

Experts have been encouraging homeowners to look carefully at their current mortgage deal and consider if a low interest remortgage would be helpful to sustain their financial position.  Without making plans for the inevitable rising interest rates many mortgage holders could find themselves in a difficult situation.  Therefore, by planning and seeking out a remortgage when needed, a homeowner can be putting into place a safety net to keep them in a secure position, even if interest rates increase.