The October meeting of the Bank of England’s Monetary Policy Committee (MPC) has revealed, through the recently released minutes that two members were set to increase the standard base interest rate.  Members Martin Weale and Ian McCafferty voted once more for a 0.25% increase to the 0.5% historically low rate.  While warnings had been strong that the interest rate would be increased in the beginning of 2015, there are now hints that the rate will last a bit longer through the next year.

The other members of the committee held fast to the current rate.  Experts believe that borrowing should remain cheap, for while the outlook is good for the UK economy there is an expected slowdown.  An increase to the interest rate could derail the current path of the economy as it sets to strengthen amongst weak economies in the eurozone.  Germany, the largest economy within Europe, may be on the brink of a recession which has caused global alarm.

The two members that did vote for the increase argued that the Bank’s rate should not be kept low for too long or it “risked unbalancing the recovery”. 

The housing market had caused the committee concern only months ago when there was a rapid rise in house prices.  It appeared for some economists that the UK housing market was on the edge of a bubble.  However, house price growth has slowed down and the fears have dissipated.

The good news is that it allows more time for those seeking a purchase mortgage and for homeowners looking to remortgage.  With longer processing times it is essential to have plenty of time to shop for a deal and then begin the procedures with a lender or remortgage broker.  For those considering a deal now, lenders have been intent to gain the attention of borrowers and have released some of the lowest interest rate remortgage and mortgage deals seen in many years.