Low interest rates are a thing of the past

With the current credit crunch going on most of us will be hoping that interest rates will fall, but the truth of the matter is, they will likely rise instead. Many experts believe that the next move will be up instead of down, so it seems that homeowners are in for a rough ride. This will also affect many first-time buyers, as they thought that with current house prices falling they would pick themselves up a bargain, but this will be cancelled out if interest rates do rise.

Hamish McRae, from the Independent has said that many people have been working under the assumption that as the economy is slowly falling, this means that there would be a cut in inflation as a result it would be the perfect opportunity for the Bank of England to reduce interest rates. The Bank of England’s job is to control the stability of the economy and try to keep inflation around 2 percent.

We are in for some hard times, many are saying that the housing market will fall much like they did in the 1990’s, but you have to remember that we are still in better shape than we was back then. For those of you who think that this is only a blip that will last just a few months, it looks as if house prices will depress consumption for years not months.

Bank of England Governor, Mervyn King has said “After a decade or more of economic stability we are now facing a period of rising inflation and falling economic growth.”

For more information on this visit: The Independent dark reprieve download