Everyone seems to have an interest rate prediction these days, along with advice for the policymakers.
Now that the UK economy appears to be recovering, there is a lot more speculation about when rates might start to rise from their current historic lows.
According to the latest Ernst & Young (E&Y) ITEM Club report, the Bank of England’s Monetary Policy Committee should keep interest rates low until Autumn next year.
In doing so, they should allow real wages to start rising as well as business investment and export levels to improve, in addition to their existing threshold of unemployment falling to 7%.
Interest rate expectations form an important part of Financial Planning as they can influence the outcome of long-term financial plans.
Within your own Financial Plan you might consider making an assumption for interest rates in the future, as this is likely to inform the cost of any borrowing as well as likely future investment returns.
When do you think interest rates will start to rise?
