UK Money News
20th February 2008
Homeowners confused by interest rate cut predictions
Uncertainty over the state of the UK economy and the timing of the predicted cuts to the base rate of interest has left homeowners unsure of which mortgage product to opt for, a survey suggests.
In a recent speech from the governor of the Bank of England Mervyn King hinted that interest rates will fall again this year should the UK's economy continue to show signs of stagnating growth.
Analysts are also widely in agreement that the Bank will move to cut interest rates further this year, with many predicting that this will occur on two more occasions.
However, the uncertainty over when these cuts will take place has left homeowners confused as to which mortgage product to choose, according to a poll conducted by Abbey.
Close to one-third of respondents to the survey confessed that they would be unsure whether a variable rate or fixed rate deal would be the best option.
Nici Audhlam-Gardiner, head of Abbey Mortgages, said: "Depending on who you talk to there are different outlooks for the UK economy and for Bank of England base rates.
"While most economists agree they will go down, there is debate about how much they will fall and when. This uncertainty leaves homeowners with a bit of a dilemma on their hands - what is the best mortgage to go for?"
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