2019 and our rate of interest predictions

The current climate means that it is nigh on impossible to be sure of anything at present when it comes to the business world and finances. It is often quoted that the only thing that is certain is uncertainty.

Of course, Brexit is the single biggest contributor to this school of thought. If we end up with a deal at all, what will it look like? And how will it impact us all, if at all?

Whilst no-one can really be sure – not even the Prime Minister, herself – the question of what will happen to The Monetary Policy Committee (MPC) base rate understandably regularly raises its head here at Euxton.

For this reason, we thought it made sense to dedicate one of this month’s blogs to our expectations in this area – and those of some industry experts. Again, understandably, even their opinions vary.

So, what exactly are those in the know saying and why?

Reflecting the British public’s views on what Brexit means for the UK, there is no one definitive answer.

Mortgage Strategy recently reported on some of these views. Their findings were as follows:

Peter Izard, business development manager at Investec Private Bank expects to see two 0.25% interest rate rises next year and believes the base rate will stand at 1.25% at the year end.

Andrew Montlake, brand director at Coreco is quoted as saying: “On the face of it, the gentle pace of interest rate rises should continue, ceterus paribus, with one or two rises of 0.25 per cent easing rates up over the next 12 months.” He is said to think that Brexit makes predictions dangerous.

Mark Harris, chief executive at SPF Private Clients reportedly believes that the end of 2019 will see interest rates of 1%.

Ray Boulger, senior technical manager at John Charcol is stated to deduce a rate of 0.75% throughout the entire year.

David Hollingworth, communications director at London and Country is said to think that rates could drop next year, stating that: “The current trajectory for interest rates has been upward and the Bank of England has been clear that rates could gradually ease up.”

He went on to say that even though a disorderly Brexit wouldn’t consequentially change that path, it could well see extra support to the economy being necessary and rates coming back down.

Euxton Mortgage Market’s expectations

Naturally, there are no guarantees as the situation we find ourselves in, as a country, is unprecedented.

Based on the opinions of the experts and others, it is Euxton’s belief that the interest rate will either remain the same or take a slight downturn by the end of next year.

We believe that whatever the outcome of Brexit, any changes made to the base rate will be subtle as the economy has such a fragile balance at present; the MPC will not want to upset individuals and businesses no matter the circumstances we are presented with.

We will, of course, continue to monitor the situation resolutely and are always here to discuss any concerns you may have.  

January 2019