You are here: Home - News -

Questions raised over base rates

  • 20/10/2003
  • 0
City forecasts on Bank of England base rates have been called into question by senior mortgage indus...

City forecasts on Bank of England base rates have been called into question by senior mortgage industry figures. Both Ray Boulger, senior technical adviser at Charcol, and Robert Hollinshead, chief executive of the Newcastle Building Society, disagree with prevailing City sentiment that a rise is imminent.

Boulger said: “The City’s track record on forecasting base rate rises has a success rate of well under 50% over the last 15 years, so basing mortgage decisions on the interest rate futures market might not be the cleverest strategy. The City is predicting at least one base rate rise by the end of this year with more to come next year, but we would advise people not to hold their breath.”

Hollinshead agreed: “There are a lot of unknowns out there and terrorism is one of them. If something bad happened confidence could quickly disappear. So while fundamental economics say rates should rise, I would not be at all surprised if they remained flat. The money markets are predicting 4.5% this time next year, a big hike from where we are now.”

However, he cautioned against abusing the low rates. “Although it is a challenge for first time buyers, most people can afford their mortgage, but the level of general debt is getting dangerously high. I think we have all got to be careful about the level of commitment we are giving people.”

I See p22 for a full interview with Robert Hollinshead.


There are 0 Comment(s)

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.


Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.


Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.


Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
  • RT @robjupp: Great day yesterday for donations to @MortSleepOut. With Gift Aid, we are now close to £17,000. It would be great to get to £2…

Read previous post:
Britannic Money bounces back as Mortgage Trust

Britannic Money has been re-branded as Mortgage Trust. Its new owner, Paragon Group, envisages the n...