According to a forecast by the International Monetary Fund (IMF), interest rates in major economies are expected to decrease in the future due to low productivity and ageing populations. The IMF believes that the increases in borrowing costs, which are being used to combat high inflation rates, are likely to be temporary. This is great news for those who are considering entering the property market or considering remortgaging,
The Bank of England has raised interest rates since December 2021 to combat rising inflation, causing mortgage payments to increase for homeowners. The IMF suggests that advanced economies' central banks will ease monetary policy and lower real interest rates to pre-pandemic levels once inflation is brought under control.
While the IMF did not specify when this is expected to happen, it suggests that the recent increase in real interest rates will likely be temporary. Inflation is currently at its highest in the UK in almost 40 years, driven by rising energy prices and food costs, among other factors.
Read the full article by Dearbail Jordan on the BBC's website.