Are you ready for interest rate rises?

Are you ready for interest rate rises with your property or with your business borrowing?

Interest rate rises
Interest rate rises are looking more likely

The news today comes with mixed messages – the good news is that UK unemployment has fallen slightly from 7.7% yo 7.6%, which shows the UK economy is improving.

However, if you owe money on a ‘Non-Fixed’ interest rate basis, then this is a step closer to interest rate rises, albeit a small one.

The still relatively new Bank of England governor Mark Carney says there is a 40 per cent chance his threshold for interest rate rises could be met by the end of next year. Carney said that “Interest rates should not rise until unemployment falls below 7 per cent unless inflation was consistently above 2.5 per cent”.

So, I like the idea that the UK economy is gaining traction and moving forward, but I’d prefer my loans to remain at the all-time low! The FTSE 100 didn’t like the news this morning and sees this as a negative, rather than as an economic positive moving down 96.79 points or 1.44%, which is interesting.

I had myself already put in place over payments on my property interest only loans and set up investment vehicles to put together a lump sum for down-payment. I have also recently used cash to purchase equipment and assets in my business, to avoid having too high gearing, so that the impact of a rate rise is kept to a minimum.

Are you ready for interest rate rises?

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