Mortgage Borrowers Hurt by Rate Hold

Posted 2008-01-3

Britain’s mortgage borrowers could pay more due to the Bank of England’s decision earlier this month to leave interest rates unchanged.

 

Because the bank failed to implement a .25 percent cut in rates, borrowers may pay an additional £105, according to Ray Boulger, broker for John Charcol. 

 

Negative news on the economy led many industry experts to predict a rate cut, according to Mr. Boulger, who believes a cut was in order.

 

 

Britons could see financial problems due to inflating prices, signaled in part by npower’s decision to increase ticket prices by 17 percent, says the financial expert.  He does point out, however, that the consumer price index has risen only slightly above the two percent target rate, and he expects the global financial situation will cause it to slow.

 

Mr. Boulger fears that if the monetary policy committee waits too long to reduce the rate, they may be forced to cut the Bank rate more deeply than would have been the case earlier.

 

Meanwhile, moneysupermarket.com predicts that more borrowers may turn to secured loans.

Leave a Reply