Qualified advisers answering your
Financial Questions
call 0800 092 1245

Could the UK government risk increasing UK base rates?

Despite the fact that the UK economy is said to be on the verge of a potential double-dip recession a number of prominent economists are calling for UK base rates to increase in the short to medium term. They fear that the reincarnation of inflation in the UK is going to cause a major problem in the medium to longer term and short term pain is required to address this issue sooner rather than later.

However, there is the chance that any increase in UK base rates could effectively kill the UK property sector which is to all intents and purposes the centre of the UK economy. A reduction in property prices would see many homeowners move into negative equity and indeed an increase in mortgage rates would see more and more money drained from UK economy to cover mortgage payments. This would then reduce the profitability of companies in the UK, causing job losses and further pressure on the UK housing market.

While base rates have had little impact upon the economy for some time now, there is no doubt that an increase in UK base rates in the short to medium term would kill any potential recovery stone dead.

Share this..

Related stories

Financial Guides

Financial Calculators

Our useful calculators can help you get your finances in order:

Latest News


Helpful new tax year facts that could affect you and your money

Blog | Seven helpful new 2016/2017 tax year facts that could affect you and your money. Our recent online blog shares a brief outline on how to stay up to date.

Read more

Useful Links

Popular Searches

Please Enter More Details

Enter More Details