Base rate expected to increase in spring 2015

Homeowners are being advised that the Bank of England may increase interest rates for the first time since the financial crisis in the spring of next year.

A member of the Bank’s rate-setting Monetary Policy Committee, Martin Weale, said that spring 2015 would be most likely time for a rate rise, in an interview with Sky News.

He said it would be difficult to change rates in the midst of the general election, which will take place in May of next year, so the increase may occur beforehand.

Interest rates have been at a record low 0.5 per cent since the impact of recession was most felt, in late 2008 and Bank of England governor Mark Carney had said they would begin to increase once unemployment fell below 7 per cent. He then revised this as unemployment levels fell faster than anticipated.

For homeowners, the Bank base rate has an impact on interest rates mortgage-holders pay on their loans.

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