Interest rates 'to rise'

18-Apr-2007

In news which might interest first time home buyers concerned about future interest rate increases, there are claims that a further rise next month is likely.

According to the Financial Times, interest rates may increase by as much as 0.5 per cent by autumn 2007, following news that inflation rose to 3.1 per cent in March, which may concern first time home buyers worried about affordability.

"This is a thoroughly nasty set of data that essentially guarantees that the Bank of England will raise interest rates by a further 25 basis points to 5.5% in May," said Howard Archer, an economist at Global Insight.

Indeed, the results of a recent survey by Reuters shows that out of 51 polled economists, 49 believe that interest rates will rise to 5.5 per cent in May.

To find out about the different ways of financing a first home, see our section ‘Affording Your First Home’.

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