Does the Bank Of England base rate meeting delay give contractors an opportunity to save money?

The Bank of England has postponed this month’s monetary meeting until the 22nd of September “in light of the period of national mourning” following the death of Queen Elizabeth II.

What should we expect from the rescheduled meeting?

Higher interest rates typically make borrowing more expensive. In turn, this results in people having less money to spend and the price of goods potentially stops rising as quickly. A key question for many is how effective rate increases are when current inflation is being caused to some degree by bigger global issues.

Energy prices has risen sharply since Covid, and these were compounded further by Russia’s decision to cut its gas supplies to Europe. Bank Governor Andrew Bailey had this to say last week “The person going to put the UK in recession is Vladimir Putin, not the MPC [Monetary Policy Committee].” He also said the Bank would take Prime Minister – Liz Truss’s energy plan announcement “into account” when next deciding setting interest rates.

It had been widely anticipated by many economists that the UK’s central bank will increase the rate from its current level of 1.75% to 2.25%, although there is a growing voice for increases above 0.5%. Regardless of the final decision, any increase would represent the highest base rate level since December 2008.

What should you do?

Matthew Long, Senior Mortgage Consultant at Cleerly had this to say “ the delay in the Bank of England meeting has not stopped many lenders from increasing rates in the last 7 days. I would strongly encourage anyone with a mortgage rate, which is due to end in the next 24 months to start engaging with a specialist broker to review the options available. Coupled with the potential of a global downturn in housing could mean much higher rates than those imposed available.”

Olivia Harland, Senior Mortgage Consultant at Cleerly added “Many clients are unaware that mortgage offers are issued with a fairly long expiry dates. This allows clients to secure a rate now but not move to the new rate until a later date. In a market where rates from lenders seem to be increasing daily. This is a strategy I have been using to protect a number of my clients. If in the highly unlikely event rates dropped before their mortgage completes, I am able to source a new lower rate”

Cleerly offer a free no obligation review of your situation; An experienced Contractor Mortgage broker will be able to work with you find the best outcome for you particular situation.

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