Interest Rate Rise Within Six Months

Interest Rate Rise Within Six Months.

The Governor of the Bank of England, Mark Carney, has suggested twice this week that we should expect interest rate rises sometime in January or February 2016. Bank of England base rates have been held at 0.5% since March 2009.

The economy is warming up.

Wages are rising faster than inflation (not difficult given that inflation is at 0% currently).

Unemployment is down to 5.6% which is far below Mr Carney's suggested interest rate trigger point of 7% and he took no action then.

Earnings increases will fuel further property price rises and general goods and services price rises. This will fuel inflation and hence Mr Carney suggesting a rate rise.

We have heard this all before from Mr Carney. That said, with the economy bubbling away and wages rising it is inevitable that interest rates will have to rise to control inflation.

As with previous interest rate rise warnings, we suggest you revisit all of your debts and mortgages that are linked to interest rates and be sure that you have protected yourself.

Do not worry too much though as Mr Carney has suggested that any interest rate rises will be "gradual and limited".