Bank of England considers interest rate rise for 2014

Mon, 21 Oct 2013

Bank of England considers interest rate rise for 2014
The Bank of England (BoE) says any rise in the base rate of interest would not harm those applying for Help to Buy mortgages.

Ben Broadbent - who forms part of the committee which decides rates - told Sky News that the BoE could increase the levels of interest by a "fair amount" without it impacting on potential homeowners trying to take advantage of the government initiative.

At the moment, interest rates are at a record low of 0.5 per cent - and have remained in this state since March 2009.

Any rise would result in mortgage payments going up for homeowners - which in turn could lead to an increase in the number of repossessions if they then struggle to keep up with higher payments.

However, the BoE has said as recently as August that it does not intend to raise the 0.5 per cent level until unemployment rates go back down to seven per cent.

Concerns have already been raised that the Help to Buy scheme will eventually lead to another housing bubble if those getting involved find themselves in trouble when rates of interest do eventually go up.
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