A poll of brokers and intermediaries working in the fields of property and asset finance has found that 92% believe that the Bank of England will increase the base rate this year.
The research, carried out by United Trust Bank, received over 120 responses. Of those who took part in the survey, 92% believe the base rate will increase this year whilst 7% believe base rate will remain unchanged throughout 2018. Just 1% felt that there would be a drop.
In a further question, brokers were asked to indicate whether they believed Theresa May would still be the Prime Minister at the end of the year. 72% believed she would see out the year in Number 10, however 28% believed there would be a change of Prime Minister in 2018.
Harley Kagan, group managing director, United Trust Bank, said:
“Since November 2017 when the base rate was increased, speculation about when the next move would come has been rife. However, in all the polls we’ve held at UTB, this result has shown the biggest consensus amongst finance brokers expecting a rate rise this year.
“However, although there seems to be expectation that an increase could come as early as May, there are several factors which might cause the Monetary Policy Committee (MPC) to show more caution. For example, The Term Funding Scheme ended in February. This provided below market cost liquidity to banks in order to encourage lending to the public and its removal may already be having an impact on saving and lending rates.
“In addition, the Bank of England has so far assumed a relatively smooth path to Brexit, but with substantial divisions within parliament, and within the Conservative Party itself, Theresa May is unlikely to find it easy to guide through her preferred Brexit based on a fragile majority. Indeed, more than a quarter of brokers believe she may not be the PM presiding over the actual Brexit at all.
“With so much uncertainty still surrounding what the UK’s economic and trading position will look like come April 2019, there’s a strong argument for leaving rates alone until the outlook becomes clearer. Whatever happens, United Trust Bank has the experience and adaptability to support brokers and customers through whatever lies ahead.”