The British Chambers of Commerce (BCC) has added its voice to the chorus urging the Bank of England to keep interest rates down. The call from the business organisation to keep base rate on hold at 0.5% comes in the wake of faster-than-expected economic growth in the second quarter of 2010. The BCC itself has revised its growth forecast to 1.7%, up from 1.3%. In normal times, higher growth would indicate that a rise in rates was on its way, to hold back inflation. But of course these aren’t normal times.
Revised growth figures suggest that Britain’s economy has bounced back more strongly than expected. For mortgage borrowers, not to mention anyone with a job, this has to be good news. Yet BCC’s chief economist David Kern shares the fears of many that the boost may be short lived. The government’s austerity measures are bound to have an impact on future growth and employment. It’s anxiety about the economic road ahead which is making the financial world cautious, not least about lending on property, with analysts unsure about prospects for house prices.
But with interest rates still at record lows, it’s still well worth looking at remortgaging options. Fixed-rate deals in particular have gained in popularity recently as borrowers have sought to lock themselves into an affordable rate. And for those unsure about moving in the current climate, remortgaging can be a cost effective way of improving your home – perhaps with an extension or new kitchen. In terms of value, according to lenders such as the Halifax, a loft conversion is the improvement which can add the most value when you do come to sell.
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