Cautious optimism that flexible UK economy will get us through Brexit…
A hot topic this week was the strong hint from the Bank of England that it would not change rates again this year…
With the economy performing better than expected after the EU referendum and with employment and wages remaining high, it is no surprise that the Bank is leaving interest rates unchanged – for now.
Of course, it is still too early to predict the kind of Brexit deal that Britain will end up with. In fact, we are still experiencing some uncertainty that is continuing to overshadow the UK economy, including the recent High Court judgment that the Government cannot trigger Article 50 on its own.
However, despite previous warnings that the economy would suffer a severe post-referendum crunch, the market appears to be resilient and the near-term outlook for activity is much better than it was just after the referendum.
I am remaining cautiously optimistic that our flexible economy will ultimately help us to navigate our way through the Brexit process.
John Phillips, Spicer Haart and Just Mortgages
…so it’s no surprise MPC decided not to cut rates again after all
It’s perhaps unsurprising that the Monetary Policy Committee has decided not to alter the Bank rate.
In August, when the rate was cut to a record-low 0.25 per cent, there were clear signals to expect another decrease before the end of the year. But we are in a period of economic unpredictability following the UK’s vote to leave the EU.
Since August, we have seen a further sharp decline in sterling, combined with stronger-than-expected growth. The weaker pound, combined with stronger demand, means that inflation is forecast to be higher than the MPC expected earlier in the year.
The minutes confirm that the prospect of a further cut to interest rates is now effectively off the table for the foreseeable future.
Andrew McPhillips, Yorkshire Building Society
Equity release sector on another high and set to exceed £2bn with ease
Equity Release Council figures found that lending in the sector reached record highs in Q3…
The latest record high for equity release lending, both for Q3 and the year to date, demonstrates how the market is going from strength to strength and is firmly established as a major part of the retirement planning market.
As retired homeowners increasingly become aware of the wide range of options available to them to improve their retirement finances, we expect the market to break through the £2bn barrier with ease.
Increased competition, lower rates and a focus on product innovation have made equity release an attractive option for retired homeowners who continue to be squeezed by both historically low annuity and interest rates.
Dean Mirfin, Key Retirement