Brexit: 'Remain' politicians should 'take the blame' says Redwood
Interest rates have been kept at unprecedented low levels for a number of years now, which has a run on affect for pensions, mortgages and other financial products. Institutions, private companies and savers themselevs often have varying views on the pros and cons of this but today, the Bank of England have released their latest Inflation Attitudes Survey covering November 2020 which assesses the general publics views on the the subject.
The survey was undertaken between 10 and 16 November and featured responses from around 1,230 nationally representative UK adults.
The questions within the survey were asked to an equal mix of male and female respondants spread across multiple age ranges.
When asked “what would be best for the economy?”, 21 percent of the respondants thought rates should go up, with 15 percent wanting them to go even lower and 35 percent thought they should remain where they are.
When asked “what would be best for you personally?”, 29 percent revealed having them go up would be beneficial.
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Additionally, 16 percent wanted them to go down.
The respondants were also questioned on what they’d expect to realisically happen with interest rates and Andrew Montlake, the Managing Director of the mortgage broker Coreco, commented on the findings: “More than a third of people expect interest rates to remain about the same over the next 12 months and it’s hard to argue with that given the challenges facing the economy.
“The double-whammy of a No-Deal Brexit and the devastation caused by the pandemic has kicked any prospect of a rate rise firmly into the long grass.
“For the Bank of England to raise rates in the current climate is unthinkable and the colossal impact of Covid-19 on the economy means it could be many years before rates rise above their current near-zero level.
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“Interest rates have been at consistently low levels since the Global Financial Crisis, which will prove to be a minor economic blip compared to the carnage set to be wreaked on the economy by Covid-19 and a No-Deal Brexit.”
The news of a potential no-deal brexit will have undoutbedtly worried many savers across the UK but according to the Bank of England’s latest financial stability report (which was also released today) UK banks are currently well prepared for serious economic shocks.
The report detiled most risks to the UK’s financial stability posed by a no-deal brexit have been mitigated but warnings remained that “some disruption to financial services could arise.”
Despite this, Richard Pike, a director at Phoebus Software, warned the general public should still remain cautious as 2021 approaches: ““For many, the financial fears following this year’s pandemic are overriding, but the potential threat posed by a mismanaged Brexit has similar magnitude to the UK’s long-term financial wellbeing.
“Nonetheless, the Bank of England says it has mitigation plans in place to help the country weather any instability that comes at the end of the transition period, which offers some level of comfort.”
“However, for the general public, fiscal thoughts are more likely to be related to job security, credit availability and disposable income.
“It is evident that lenders’ appetite for high LTV lending has diminished as income levels have been hit hard by the pandemic and credit risk increases.
“So it is good to see that the FPC is reviewing its mortgage market recommendations in 2021 to reflect the changes the market will face post-pandemic.
“There is no doubt that we are in for a turbulent start to 2021 but, with the vaccine rolling out, there is light at the end of the tunnel, to get us through the pandemic.
“However, it remains to be seen how the economy reacts to the outcome of the Brexit negotiations, and the next few weeks will be telling in this area.”
Currently, the Bank of England base rate is 0.1 percent, the lowest it has every been.
The next review will occur on December 17 and some experts have warned it is merely a matter of when, not if, the central bank moves into negative rates.
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