In a speech at Queen Mary University yesterday, Bank of England governor Mark Carney said ‘now is not yet the time’ to increase interest rates.
He said the collapse of oil prices, the weak economic performance in China and the slowdown in UK wages and growth meant it was not necessary to raise the Base Rate at present.
Mike Coady, managing director of deVere Mortgages, said the belief that very low interest rates are the new normal, combined with the view that UK homes are priced correctly in the current climate, will continue to drive mortgage applications for the next few years.
He said a rate rise will take place in 2017 at the earliest due to headline Customer Price Index inflation being almost back to zero, and optimistic forecasts for wage growth in 2016 of 3.75%.
Coady added there was little reason to expect rates to return to levels of before the credit crunch when they do eventually rise.
