The Bank of England has hinted that it could raise interest rates for the first time in a decade to curb inflation, with economists predicting a hike could come as soon as November this year.
In the minutes of its latest Monetary Policy Committee meeting, the Bank said: “A majority of MPC members judge that, if the economy continues to follow a path consistent with the prospect of a continued erosion of slack and a gradual rise in underlying inflationary pressure then some withdrawal of monetary stimulus is likely to be appropriate over the coming months to return inflation sustainably to target”.
Members of the MPC voted by a majority of 7-2 to maintain interest rates at 0.25%.
However, the Bank said that the decision to raise rates would not only depend on inflation but also on the continued strength of the economy. Today’s decision comes after the Office for National Statistics revealed that that inflation rose by 2.9% in August, up from 2.6% in July – equalling the four-year high hit in May this year.
In August, the MPC forecast two rate hikes over the next three years, with the first not until the third quarter of 2018. Today’s announcement suggests there could be a hike far sooner than this.
This all means for the expat mortgagee that interest rates are very likely to increase sooner rather than later. So, very good advice would be to review your current mortgage deal to ensure it is right for your long-term future.
If you would like to talk to an adviser about your current mortgage or indeed require a new mortgage please make contact and we will be happy to help.