Base rate will not rise in May, says expert

A base rate rise will not come in May, InvestmentandBusinessNews.co.uk told those thinking of their mortgage rates.

Michael Baxter, editor of the business and economic news website, said that the positive Gross Domestic Product GDP figures are likely to delay increases in the base rate of interest by a month or two.

However, he told those looking into competitive mortgage rates to weigh up the benefits of fixed rates versus cheaper trackers that the general consensus indicates that the base rate will rise once or twice this year.

"Although I think there is a strong possibility that that will happen, the repercussions of doing that are going to be worse than generally thought. I wouldn't be at all surprised if we saw it going back to half a per cent next year," Mr Baxter explained.

The Monetary Policy Committee is next set to discuss a possible increase on May 5th, although the last change was a reduction to the current rate of 0.5 per cent in March 2009.

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2011-05-03 13:03:35 © Moneyextra.com