60 seconds with Marcus Brookes on the outlook for interest rates in 2015
A change in the outlook for interest rates
When looking at interest rates for the rest of 2015 there has been a change in mind-set over the last three to four weeks.
Coming into this year we knew that the US had grown very well – at about to 2.4% over the course of 2014 - that led us to expect that interest rates would be rising sometime around June 2015.
But there has been unemployment data coming out in the US, which while it is still pretty good is not falling quite as fast as it was.
That has led people to reassess their expectations for a June rate rise and maybe think about a rise in September or even December this year.
What does that mean for UK interest rates?
The Bank of England (BoE) was thought to be considering a rate rise just after the Federal Reserve (Fed). So, if June was the likely month then maybe the BoE would raise rates in August.
With this now slipping to September and maybe even December for the Fed the BoE may wait even longer. It may wait until late 2015 or even into 2016.
Mortgages are probably going to go up, which was our expectation anyway. However, maybe they might go up a bit later than we all expected.
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