Search Coreco

Does anyone really care about the base rate anymore?


Let’s face it; there is more chance of Sepp Blatter becoming the next England manager than the Bank of England changing their rate from the 0.5% low at present. But as has been the case for many a month now, the rate itself is not the real issue, it is everything else that is happening around it and boy there is a lot going on.

The Euro turmoil is starting to affect the biggest countries in the EU now, and for the first time in around a decade the UK is now able to borrow on cheaper terms than Germany. German 10 year government debt rates increased to 2.21% whilst the UK, relishing it’s new found “safe-haven” status, sits at a mere 2.16%.

This is hugely significant, and will up the pressure on Merkel et al to sort it all out once and for all. With the markets becoming more and more convinced of an EU zone break up of some description, the politicians seem to be stuck in a holding pattern of indecision.

Back on our fair Isle, however, although there is a growing movement against austerity cuts, there is a general acceptance that, hard as it is, these things need to be done to chart a safe passage through stormy times.

Today UK growth was confirmed at 0.5% in the 3rd quarter of this year and earlier this week the Government launched its much anticipated Housing Strategy, pulling together a range of announcements with a couple of new ones to try to stimulate growth and return some confidence back to the house building industry.

Whether you agree with the content of this or not, the point is that at last the Government is trying to do something to help stop a housing issue become a full blown crises. Having been fortunate enough to discuss the report over lunch with the Rt. Hon Grant Shapps MP yesterday at the House of Commons, it was refreshing to see the passion behind the policies.

In the meantime more lenders have increased their rates further, with at least one other lender also increasing their variable rate. We are beginning to see the expected increase in remortgage business as a result.

With rates available from just 2.29% on a tracker basis (The overall cost for comparison is 3.80% APR), or 2.58% fixed until 31/01/2014 (The overall cost for comparison is 4.70% APR), 2.94% fixed until 28/02/2015 (The overall cost for comparison is 3.50% APR) and 3.39% fixed until 31/01/2017 (The overall cost for comparison is 4.00% APR), all with free legals and free valuations, it is an excellent time to reserve some outstanding products.

Comments are closed.