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Rate hold decision a close shave, predicts Charcol

Charcol has predicted that the Bank of England&#39s decision to hold base rates at 4% was probably a close shave.

Senior technical adviser Ray Boulger says that with a mixture of both positive and negative economic news emerging over the last month, it must have been a difficult decision to make.

He says: “The MPC probably feel they are between a rock and a hard place, with the housing market showing renewed strength and consumer spending still buoyant, but other sectors, particularly manufacturing, struggling to make much headway.

“Furthermore the sterling remains strong against the dollar and is improving steadily against the Euro. With the European Central Bank and the Fed unlikely to increase rates in the near future, and speculation about a drop in the ECB&#39s current 2% rate, it is unlikely the Bank of England will want to widen the interest rate gap too far. This is one factor likely to restrain the amount and speed of base rate increases in the UK.”

Boulger says that the best value is still to be found in discount or tracker mortgages unless the base rate increases to over 5%. However, he says some borrowers will consider it is worth paying the higher initial price of a fixed or capped rate for the security and peace of mind they offer, despite some of the best fixed rates having been re-priced upwards this week.


Online valuations seen as most vital e-business development

Four out of five advisers claim online valuations are the most vital e-business development to help their business, research by 1st Software reveals. Following a period of rapid development by providers, portals and online adviser services, the poll revealed a positive picture of growing e-business usage amongst the adviser population. A surprisingly high 40% of […]

UK trade figures confirm imbalanced economy, says Lib Dems

The Liberal Democrats say recently published trade figures show the UK economy is heading for another record deficit. Malcolm Bruce MP, Liberal Democrat trade and industry spokesperson, says: “While house prices and consumer spending are booming, manufacturers and exporters are still facing a tough time. The government cannot simply rely on the Bank of England […]

£30bn alliance now has 36,000 members

Bankhall and Paymentshield now control mortgage lending of more than £30bn and have a combined membership of over 36,000 intermediaries as a result of their strategic alliance. Bankhall also revealed last week that it is to spend a further £10m on developing its IT systems as it works towards eliminating unnecessary paperwork. The organisations last […]

Unspoken fears about Fannie&#39s well-being

Here&#39s a pop quiz for European financial institutions that own stock in US mortgage giant Fannie Mae: How much has the company&#39s share price appreciated over the past three years? If you answered zero go to the head of the class. Yes, investors in Fannie Mae stock are not a happy bunch. Fannie&#39s share price […]


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