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Base rate forecast favours borrowers

Base rate forecast favours borrowers

Category: Savings

Updated: 09/02/2010
First Published: 09/02/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Borrowers will be beaming but savers sour faced after it was revealed a third of financial advisers do not expect the Bank of England to raise interest rates for at least another year.

According to research conducted by AXA Investment Managers, Baring Asset Management and Cazenove Capital, one adviser in ten expects base rate to remain unchanged for another two years.

A move within the next three months was predicted by just 6% of those surveyed, while 24% said it would take six months and 28% anticipate a wait of nine months.

While another year of low interest rates will please mortgage borrowers, savers already struggling to find a decent return will be less from thrilled.

With the UK only just emerging from recession, Theodora Zemek of AXA Sterling Corporate Bond Fund, said it was unsurprising that an imminent rise in rates had not been forecast.

"On balance we would expect the first rate rise in the second half of this year," she added.

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