Consumers are aware that inflation could continue to rise over the next five years and Jonathan Said, senior economist at the Centre for Economics and Business Research (CEBR), has said that buyers are “trying to hedge their bets”.
He suggested that consumers are “reactionary” and that people were taking into account the fact that rates could rise again soon, adding that people were perhaps thinking short term about the risks of taking on a mortgage because of this.
compare mortgages
“However in the longer term there is space for the argument that interest rates might average a bit higher. There would seem to be a case for consumers to want to go for a fixed rate,” he commented.
“But they might not in the end. Interest rates do come down. But at the moment we’re in that climate of rising inflation, rising interest rates.”
The Bank of England is widely expected to raise interest rates this month to 5.5 per cent, because of concerns over the level of inflation.
© Adfero Ltd
Loading ...