Mervyn King, governor of the Bank of England, outlined what the UK can expect in regard to a base rate hike last week.  This decision to maintain the current base rate almost guarantees the remortgage market will remain stagnant for months to come.  In addition to declaring a base rate hike will take place only after an increase in employment is apparent, the possibility of more QE was mentioned.  The base rate has been sitting at the historic low of 0.5% for more than two years now.

The latest Monetary Policy Committee vote to raise the rate was greatly one-sided.  A final tally of 7-2 was the outcome, with a decision to maintain the current rate for another month.  Carl Astori, Coutts head of investment strategy for the UK, now believes the hike will take place around November of this year. 

He said: "With households struggling to make ends meet as their real take home pay is squeezed by a triple whammy of low wage growth, rising commodity prices and rising taxes, the bank will be in no hurry to raise rates. Doing so would just heap further misery on beleaguered households."

Astori also thinks fiscal tightening could possibly lead to another round of QE, if tightening belts causes growth to be stifled.

Ariel Bezalel, manager of the Jupiter Strategic Bond Fund, commented on the possible additional round of QE, saying: "Interest rates will remain low for a very long time. 90% of households with a mortgage are on a variable rate so any rate rise will hit them hard. If we saw more than a 0.25% rise later this year we could see headlines of a double dip back on the front of newspapers. The probability of more QE is increasing instead."