The start of 2015 is bringing out predictions for the year. Most homeowners waiting on the fence about getting a remortgage are anxiously awaiting news concerning possible hikes to the Bank of England’s standard base interest rate. Only months ago there were signs that the first change to the 0.5% rate would occur by the end of 2014. Then the forecasts moved to the beginning of 2015, but with the weakening global economic market the forecast was moved to later in the year, possible autumn of 2015.

There are many factors that must align for the Monetary Policy Committee (MPC) to decide for a rate increase, including unemployment levels, inflation, growth of GDP, and the housing market.

According to economist Howard Archer of IHS Global Insight, the MPC could move the interest rate upward of 0.25% to 0.75% by August of this year. It would be the first increase of the Bank’s rate since March 2009.

Mr. Archer expects the economy to grow by 2.7% which would be the best performance recorded since 2006. Unemployment would decline to 5.3% by the end of the year.

“Persistent low oil prices are expected to keep UK consumer price inflation very low (we see it averaging just 1.0% in 2015), which along with improving earnings growth and further increases in employment should give a marked lift to consumers’ purchasing power,” Mr. Archer said.

He added, “Consequently, consumer spending is seen growing by close to 3.0% in 2015.

“Low oil prices should also help global growth to gradually improve during 2015 (notably including in the Eurozone) which will be supportive to UK exports.

“Assuming that there is no major extended political uncertainty following the May 2015 general election (and this could turn out to be a big assumption!), this backdrop should underpin healthy business confidence and support robust business investment. Ongoing easing in credit conditions should further help matters.”

In regards to UK house prices, Mr. Archer expects the average house price will rise by 5.0%.

He said, “While the recent Stamp Duty reform should have a beneficial impact on the housing market (it is estimated that 98% of buyers will now pay less stamp duty); we doubt it will cause housing activity and prices to see a major turnaround.

“While we expect some pick up in housing market activity in 2015 from the recent lows, we expect the increase in activity to be relatively limited thereby keeping a lid on house prices increases.

“There is also the possibility that the markedly increased likelihood that the Bank of England will not lift interest rates before late 2015 will provide some limited near term impetus to housing market activity.”