City experts were split over the effects of the latest inflation figures released by the Bank of England (BoE) but at least in the short term homeowners can expect to see little change in their mortgage interest rates. How and where savers can find a safe haven for their money, however, becomes more complicated by the day.
Inflation and growth overestimated
The report suggested that the BoE’s prediction for growth in the economy and the inflation rate may both have been too high and they now forecast both to be less than they first thought. Following on from the announcement of the USA’s federal bank’s assumption that low interest rates will be around for at least the next two years the BoE seem to be suggesting the same thing in the UK.
Borrowers will benefit
This is good news for homeowners who have held mortgages for some years and have benefited from the low interest rates that currently are attached to their mortgage. It is also good news for those looking for a home insurance quote on a new home if they have the wherewithal to find the huge deposits that lenders are now looking for. It is not such good news for savers who seem to be running out of options for safe places to put their money.
Riots will make investors think again
The riots in London and other Provincial cities will have caused many homeowners to make household insurance claims; the same will apply to landlords and property investors. The letting and housing sector in London has been booming for the last 12 months and much of the investment in the housing market has come from savers who have been looking for a good return on their cash.
Banks have only offered miserly interest rates for over two years now and the uncertainty of the currency exchanges has ruled them out for all but the boldest of investors. Gold has been a safe haven in times of trouble down the ages but the current price of gold means that opportunity has now passed. That left property and the stock markets as the best two choices for the average investor. The astounding fall in share prices across the globe last week may have decided many global investors to turn their wallets towards the London property markets, the disturbances of the last four days will have ensured that idea is put on the back burner for many, and investors and savers across the world must be wondering just where is a safe place for their money.