It will be interesting to see if this happens or not. For new mortgage borrowers who are prepared to consider trackers, this could be beneficial as long as banks do not increase the spread above base rate. One option may well be to take a tracker but take advantage of the 10% overpayment facility most banks allow. Essentially this allows you to to 2 things. Pay your mortgage down quicker as long as interest is calculated on a daily basis. Secondly, it also prepares you for when base rate does increase which means you wont have too much of a payment shock.
(Taken from Mortgage Solutions)
Capital Economics has predicted the UK's base rate could be cut imminently after the latest minutes from the Monetary Policy Committee (MPC) showed members were considering further stimulus measures.
The minutes from September's meeting - when rates were left on hold at 0.5% and the quantitative easing programme was left at £375bn - showed all nine members voted to keep the asset purchase programme where it was.
Members also unanimously voted for rates to stay where they are, but the minutes noted a number of members "felt that additional stimulus was more likely than not to be needed in due course".
Martin Beck, UK economist at Capital Economics, said the minutes did little to diminish the prospect of further policy stimulus over the coming months, and he predicted a rate cut could be seen by November.
"We think there continues to be a decent chance of an interest rate cut in November," said Beck.
"We also still expect another £50bn of asset purchases to be announced at November's meeting and for QE to ultimately reach £500bn," he added.
Outgoing Bank of England governor Mervyn King hinted rates could fall earlier this year in a meeting with MPs.
"There is nothing in principle against cutting bank rate further if that turns out to be necessary", King told the Commons Treasury Committee.
Rates have been held at the current record low since March 2009, after an aggressive series of cuts by the MPC were introduced to help try and tackle the financial crisis.
The minutes also noted the Committee expects inflation to fall back to its 2% target more slowly during the remainder of 2012 than previously thought. Inflation fell to 2.5% last month, the latest data revealed.
The MPC added there has been encouraging signs about the impact the Funding for Lending Scheme has been having on lending rates.
“Two of the largest lenders to the UK corporate sector have already announced improvements in the terms on some of their lending and there had also been some further announcements of reductions in interest rates on certain mortgage products, although some other banks had announced increases. It would probably take some time for banks to review fully their lending plans."
(Taken from Mortgage Solutions)
Capital Economics has predicted the UK's base rate could be cut imminently after the latest minutes from the Monetary Policy Committee (MPC) showed members were considering further stimulus measures.
The minutes from September's meeting - when rates were left on hold at 0.5% and the quantitative easing programme was left at £375bn - showed all nine members voted to keep the asset purchase programme where it was.
Members also unanimously voted for rates to stay where they are, but the minutes noted a number of members "felt that additional stimulus was more likely than not to be needed in due course".
Martin Beck, UK economist at Capital Economics, said the minutes did little to diminish the prospect of further policy stimulus over the coming months, and he predicted a rate cut could be seen by November.
"We think there continues to be a decent chance of an interest rate cut in November," said Beck.
"We also still expect another £50bn of asset purchases to be announced at November's meeting and for QE to ultimately reach £500bn," he added.
Outgoing Bank of England governor Mervyn King hinted rates could fall earlier this year in a meeting with MPs.
"There is nothing in principle against cutting bank rate further if that turns out to be necessary", King told the Commons Treasury Committee.
Rates have been held at the current record low since March 2009, after an aggressive series of cuts by the MPC were introduced to help try and tackle the financial crisis.
The minutes also noted the Committee expects inflation to fall back to its 2% target more slowly during the remainder of 2012 than previously thought. Inflation fell to 2.5% last month, the latest data revealed.
The MPC added there has been encouraging signs about the impact the Funding for Lending Scheme has been having on lending rates.
“Two of the largest lenders to the UK corporate sector have already announced improvements in the terms on some of their lending and there had also been some further announcements of reductions in interest rates on certain mortgage products, although some other banks had announced increases. It would probably take some time for banks to review fully their lending plans."
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