Jun
6
06/06/2008
Today’s meeting of the Bank of England’s Monetary Policy Committee decided that bank rates should stay at 5.0%. This means there has been no movement in the Bank rate since the 0.25% cut on 10 April.
The Bank is concerned about the level of inflation, which at 3.0% is ahead of government targets. A report published by the Bank during May expressed fears that inflation could get out of hand if interest rates were lowered. But many people are harbouring a suspicion that inflation is already ahead of published figures. Rising fuel, utility bills and food costs (which are estimated to be up 6% on last year) means that people have no choice but to spend extra on life’s essentials. Many luxury goods have dropped in price, which might be comforting if you’re shopping for a new TV but no use at all if the weekly budget doesn’t stretch to cover your child care costs.
Economists are divided into those who think interest rates will have to rise to keep inflation in check, and those who think they will fall but probably not until late in the summer or early autumn. Rising interest rates will put pressure on the demand for pay increases and will affect an economy already in slow-down mode, but for the home owner they could be disastrous.
Those with high mortgages are feeling the pinch, and not just because the mortgage repayments have risen. Other essential costs are now so high that careful budgeting is required if the income and outgoings are to balance. With no interest rate drop in sight, no end to what seems like ever increasing petrol prices, and murmurings that food has been too cheap for too long, what can the hard-pressed homeowner do?
Budgeting is vital to stay afloat. It can be useful to check your own inflation rate by looking back at bills from six months or a year ago, seeing what has risen the most and targeting those items as ones on which you need to economise. If you are unable to meet your mortgage repayments it is worth asking your mortgage or loan company if they can help by reducing interest payments for a period of time, or extend the term of the loan to make repayments more affordable.
If you need to sell up to pay off your debts you are unlikely to find much encouragement in the housing market, which continues to slow. The Halifax reported a drop of 2.4% in house prices during May, continuing the downward trend. It’s not all bad news as the drop will help first time buyers get on the housing ladder and, over time, stimulate the market, but it remains gloomy reading for anyone wanting to sell quickly.
With Property Rescue you WILL be able to sell your home fast because they promise to make a guaranteed offer for any home in any location, and in any condition. Simply call them for details and a no-obligation valuation of your home. Don’t leave financial problems unattended or pretend they’re not happening; these decisions are painful and difficult but are always better tackled head-on. The advice from Property Rescue is free and in confidence.