Don´t Increase Interest Rates, Experts Tell

Interest rates must stay low to support the UK’s fragile economic recovery, international economic experts from the Organisation For Economic Cooperation and Development (OECD) declared recently.

An in-depth survey of the UK’s economic outlook urged the Bank of England to keep rates down despite concerns about rising inflation. Continuing low home loans could help encourage consumer spending to help the economy expand, the report from the Organisation for Economic Cooperation and Development said.

The report also praised tough action by the coalition Government to cut spending and reduce the country’s record borrowing deficit. But it raised questions about the strength of the UK’s economic recovery, scaling back its growth forecast for this year from 1.7 per cent to 1.5 per cent.

From a property investor’s standpoint, anything that holds down interest rates for longer is to our benefit. It makes buying property cheaper, and increases the net income for landlords.

Whilst we all understand that the reason for low interest rates is a weak economy, property investors win all ways around with continuing low rates. It extends the ideal buying period at the bottom of this property cycle.
Incidentally, it also means that for most investors it may be a little early to lock into fixed rates. Staying with variable rates over the next couple of years could end up proving very beneficial.