2nd October 2015
Concerns surrounding the global economy will keep interest rate rises on hold until the middle of 2016, the Centre for Economics and Business Research (CEBR) has said.
CEBR expects the UK economy to grow by 2.5% this year, but anticipates this to slow to 2% in 2016 and then average to 1.7% over the period covering 2017-2020.
This, coupled with decreasing growth prospects across the global economy, means the UK economy is likely to keep inflation on the Consumer Price Index below 2% until 2017.
The global economic slowdown, which has mainly been driven by growing weakness in emerging markets, particularly China, is holding back UK export prospects and restraining business investment, the forecasting house said.
The CEBR said household spending is expected to account for the majority of growth over the next five years rather than trade or investment. With the UK continuing to import more than it exports, it explained that net trade will act as a drag on growth with the UK’s current account deficit expected to average £77bn over this period.
This seemingly bad economic news has a silver lining for those considering Equity Release, as the interest rates on offer are low and likely to remain so.
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