Could UK mortgage rates really hit 14% within two years?

As a consequence of a Think Tank forecast that UK base rates could rise to 8% over next two years, after the UK finally exits a potential double dip recession, there is the possibility that UK mortgage rates could rise to between 12% and 14%. This would be a crippling rise for the UK property market and could potentially push the UK back into a downward economic spiral. There is no doubt that even the slightest incorrect adjustment to UK base rates at the wrong time could have a detrimental impact upon the UK economy in the short to medium term.

There will eventually be a very fine line between a perfect economic policy and one which either sees inflation eat away at the UK economic recovery or pushes the UK into a double dip recession. It is very difficult to call which direction the UK economy will take in the short to medium term and doomsday scenario forecasts built on "credible figures" will continue to spook the markets and spook investors for some time to come. Historically the Bank of England has enjoyed a relatively low-key involvement in the UK economy, preferring to pull the levers behind the scenes, but this ongoing economic situation has called for a drastically different approach.