Bank of England Predicts Lower Growth than Original Estimate
The Bank of England is indicating interest rates will remain at the current low level for at least another year, whilst economic growth has been cut for the period of three years. Growth of house prices within the UK housing market, which has been estimated at almost 5% this year, has been adjusted down to just more than 2.4%. This is now closer to most estimates, which were in the 2.9% level.
Estimates for growth are difficult to nail down due to the UK being one of the fastest growing countries.
The governor of The Central Bank, Mark Carney, commented on the short term financial outlook, saying: "Although it could temporarily turn negative in the near term, inflation is expected to pick up notably towards the end of the year as past falls in prices drop out of the annual comparison.
"The MPC (Monetary Policy Committee) expects the past falls in commodity prices to be relatively short-lived and will therefore look through them in setting policy.”
A spokesperson for the Central Bank commented on the current possibility which will occur with interest rates, combined with inflation, saying: "A path that implied only gradual rises in Bank Rate over the next few years, broadly in line with the current market path, remained consistent with absorbing slack and returning inflation to the target within two years.”
The occurrence of more remortgage activity within the coming months is also a high possibility due to the timing of the market in the selling season.