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Brokers told interest rates could go either way

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  • 29/06/2016
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Brokers told interest rates could go either way
The Association of Mortgage Intermediaries (AMI) told brokers this morning there is total uncertainty about the direction of interest rates, with no timescale for the previously projected incremental rises to 3%.

Speaking at the Financial Services Expo in Cardiff, Robert Sinclair, chief executive of AMI, said the Bank of England and its Monetary Policy Committee (MPC) has a significant job on its hands over the next few months in terms of how it reacts to the post-Brexit fallout.

Sinclair said: “The big question is, what next for the Bank of England and the MPC? It is really caught on the horns of two issues – whether it protects the value of sterling or it controls inflation.”

Sinclair said that the way the MPC prioritises those two problems will dictate what it chooses to do with the Bank Base Rate (BBR).

“How far can you cut the BBR?” he asked. “Can you go to negative BBR? These are questions that are being discussed now. The MPC will have to make decisions in July, August and September about continued quantitative easing and the direction of BBR. Normally it wouldn’t want to make decisions within those months at all.”

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