UK Economy Outlook Supports a Remortgage Now Strategy
England Chief Economist Spencer Dale believes the UK economy is set for very low growth, increased inflation and higher employment for the next five years. He doesn’t see the economy hitting the Monetary Policy Committee’s inflation target of 2 per cent. Dale admits the outlook for UK has deteriorated in recent months and the economy will not return to normal "for an awfully long time."
Dale admits that Britons face living standards that are less than good as taxes rise, house prices stall and unemployment sees more joining the ranks. If inflation continues to rise it is more likely the Bank will raise the base rate thus raising interest rates on remortgage loans. In addition, as more homes enter the housing market for sale and less are approved to buy, home prices will fall. This will cause a drop in home value for homeowners, which means a drop in equity built into properties. With the possibility of higher interest rates and lower home values in the future it would do well for homeowners considering a remortgage to seek advice now. Remortgages are popular for homeowners that have moved into their lenders standard variable rate as well as those who are trying to consolidate debt. Dale noted that the Bank will continue to monitor the inflation numbers and will act if and when it rises. He said: "We know the evils of inflation. It adds to uncertainty, it destroys value of hard-earned cash and reduces the efficiency of the economy. We have to be incredibly vigilant".