General election 'could affect savings and mortgages'

A change of government this spring could potentially impact upon the availability of cheap mortgages and attractive savings interest rates, it has been claimed.

Ray Boulger of independent mortgage adviser John Charcol, noted that the difference in political ideologies between the main parties means it is difficult to predict what will happen to interest rates after May 6th.

He said the Bank of England's Monetary Policy Committee wants information on the new government's financial plans as soon as possible after the election, allowing it to decide on an appropriate course of action.

Mr Boulger suggested that interest rates could either stay at 0.5 per cent, or rise, depending on which party wins the election - while a hung parliament could create even greater uncertainty.

"Anyone considering a new mortgage before the election should not ignore the political risk," he added.

"[This is] not only because of the impact the result could have on interest rates but, perhaps even more importantly, because of the impact the result will have on the UK economy."

Earlier this week, prime minister Gordon Brown announced that the general election will take place on Thursday May 6th 2010.

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2010-04-09 13:05:47 © Moneyextra.com