The freeze on wages coupled with rising food, gas and petrol prices has led to one study confirming that actual disposable income for UK citizens is now lower in real terms than at anytime since the 1970's. That is the lowest in 40 years. We're not necessarily in agreement with that research, but it does show that the austerity measures are beginning to bite. In light of these difficulties, a number of commentators are stating that rates will not change for another 12 months, others say they will rise 'slowly but surely by the end of this year. If two views weren't enough, the splinter group predicts that rates will have to rise a lot quicker than expected next year even though this will cause a political and financial fallout.
UK interest rates calls are now impossible as the 'consensus' changes almost monthly. As a mortgage broker and not Government or private economists, internally, we do see at least one rate rise in the next few months. The fact remains that if borrowers are cautious and want certainty, they should fix. If they are willing to take a gamble and want to minimise their monthly payments, then they should consider a tracker - as in the short term, they are clearly cheaper. There are now products from both the Woolwich and today announced by Yorkshire Building Society, which even the commentators would likely agree and that is the 'Track and Fix.' This allows you to track whilst rates remains low and to fix at any time without penalty once they rise rates start to increase. Some certainty in an uncertain world!
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