13 Apr Ultra-low interest rates set to return to UK
Great news for those in the market for a fixed-rate mortgage – banks and building societies are gearing up to slash costs in the short to medium-term. This is due to the International Monetary Fund (IMF) having now predicted that ultra-low interest rates will return to the UK shortly, with inflation set to fall sharply in the coming months. So, if you’re looking to take advantage of these developments, now might be a great time to start planning your next steps in the property market!
If you are looking to buy or sell in Wentworth or the surrounding areas, we are here for you. As your trusted local estate agents, we aim to keep our buyers and sellers informed about the latest developments in the financial landscape that may affect the property market. If you’re thinking of moving, renting or buying, and want some home inspiration take some time to browse our properties available in Virginia Water and the surrounding areas. If you have any questions, you can also visit our award-winning website or call us on 01344 843000 or email us.
As the World’s banks try to avoid a recession and more failing banks the IMF announces a rapid return to very low interest rates…
In recent weeks, you will have heard or seen that there have been a number of bank failures and near-failures, both in the US and Europe with the collapse of Credit Suisse. This has put global financial stability at risk. However, according to the report by the International Monetary Fund (IMF), ultra-low interest rates are set to return in the UK. The report predicts that inflation, which was ‘a short-term issue sparked by the pandemic’, is likely to be a temporary issue for the global financial climate rather than a permanent change.
We have already seen wholesale energy costs have experienced a significant decline in recent months. While this decline has not yet translated into lower household bills, it does suggest that the projected cost of utilities may not be as substantial as initially predicted for this year, so interest-prices coming down comes as no surprise at all to us.
According to the IMF analysis, the natural rate of interest, which serves as an anchor for monetary policy that neither promotes nor discourages economic activity, is projected to remain low in advanced economies or potentially decrease further in emerging markets. This could enable governments to borrow at more affordable rates, thereby reducing fiscal pressure and possibly leading to more advantageous rates for us.
Although the pandemic may have shifted the natural rate of interest higher, the IMF believes that the impact of developments like the transition to a less carbon-intensive economy remain to be seen. Nonetheless, the fund’s analysis suggests that the current high rates “are likely to be temporary”.
If interest rates return to their pre-pandemic low levels, and there’s a severe recession, central banks may have to use the same strategies that they did before the pandemic. These could include things like balance sheet policy and forward guidance – we shall wait and see.
We are smashing through the months of 2023, we hope that positive news on the market continues.
At Barton Wyatt, we are committed to helping you navigate the property market with confidence. Whether you are looking to buy or sell in Wentworth or the surrounding areas, our experienced team is here to provide you with the support and guidance you need. As always, we will keep a close eye on the financial landscape and keep you updated with any news that may affect the property market.
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If you are thinking of moving in or out of the area, make sure you take a look at our amazing catalogue of properties for sale in Virginia Water and the surrounding areas. If you’d like to speak to someone about properties to let in Virginia Water, a member of our expert team would be happy to help. You can call us on 01344 843000 or email us. You can also follow us on Facebook, Twitter, Instagram, and LinkedIn.