Interesting outlook from IMF

As world bankers and financiers gather in Washington for the spring meeting of the International Monetary Fund (IMF) there’s good news on the way as it’s predicted interest rates will be heading.

That is, good news for borrowers as the IMF is making the call that interest rates will head back towards their pre-Covid levels. In the UK the floor was just 0.1 per cent and although they have now risen to 4.25 per cent it looks as if the upward trend will very soon reverse.

“When inflation is brought back under control, advanced economies’ central banks are likely to ease monetary policy and bring real interest rates back towards pre-pandemic levels,” states the IMF. “How close to those levels will depend on whether alternative scenarios involving persistently higher government debt and deficits, or financial fragmentation materialize.

“In large emerging markets, conservative projections of future demographic and productivity trends suggest a gradual convergence towards advanced economies’ real interest rates.”

If the IMF is right, it’s a boost for borrowers such as households making mortgage payments who may be looking to move home and therefore in need of a new loan. Despite the current level of UK interest rates, mortgage lenders are already competing to put their funds into bricks and mortar. This means borrowers will have a choice of offers, maybe not as wide as they used to be for a while but competitive for all that.

House prices are also holding firm and it looks as if the market adjustment after the Covid-inspired boom will not be as dramatic as once thought, if it happens much at all. So the residential property market remains healthy with a good supply of buyers looking to move.

For more information, contact Randalls Residential Estate Agents in Basingstoke on 01256 345635.