The Loans Organisation - Articles - Economy Picks Up
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Articles > Economy Picks UpMany financial experts have over the last couple of months been predicting that we will not see any change in the rate of interest for the remainder of this year. This view has been strengthened during this month as inflation has risen due to higher fuel costs brought about by the hurricanes in the oil producing regions of America, and now the view is further backed up by recent happenings in the high street and the mortgage markets.Figures show that spending on the high street or online rose during September by 0.7%, a rate that is way above what was forecast by analysts based on reports by the British Retailers Consortium. Much of the pressure on the MPC (Monetary Policy Committee) to cut interest rates is coming from the retail sector, and so this performance may well ease this pressure, making it less likely for rate cuts to occur in the short term at least. The increase of consumer spending is certainly good news for the whole retail sector, however it is too soon to tell if the recovery will continue, and opinion is currently divided as to whether the worst has passed for this sector. To put things in perspective, even with the recent unexpected rise in sales, the sector still produced its lowest annual growth for ten years. Mortgage lending is also seeing a modest recovery at present, and while the majority of the custom is coming from remortgaging, there is increasing fresh demand from first time buyers as well, which is certainly a good sign. All of this means that interest rates are very likely to remain unchanged at least until the new year, especially as the holiday season tends to see consumer spending pick up of its own accord, thus the MPC can worry less about the retail sector during this time. Rates remaining the same will mean that your loan and mortgage costs will also remain unchanged, and while you wont seen any savings, at least your costs look likely to remain stable for the near term. |
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