4.5% interest rates forecasted for year’s end
Global Insight predicts that interest rates could be as low as 4.5% by the end of 2008. It is also esteemed that in the first half of 2009 rates could decline further to 4%.
“We currently forecast interest rates to fall to 4.50 per cent by the end of 2008 and to 4.00 per cent in the first half of 2009. This is based on our assumption that the UK will avoid recession, but will see extended below-trend growth,” offered Howard Archer, chief European and UK economist for Global Insight.
He also added that the company’s specific predictions of the GDPs growth will be limited to 1.8% in 2008 and 2009 which would be “the equal weakest performance since 1992.”
With the most recent interest decision, which was expected to cut rates by at least another quarter per cent, there is no denying the slowing of the over-all economy in the UK.
This new landscape will however, offer a correction to the lending and housing industries, thus bringing more affordability to home buyers as housing prices and lending rates dip with the trend.