Will Interest rates rise in 2015?

Interest Rate Expectations

Experts predict that interest rates may rise this year 2015,which may lead to businesses and individuals becoming unable to service the additional interest costs. 

However the Bank of England has held rates at 0.50% for the 71 month  (since 2009) in a row and also kept its stimulus package of QE,whilst Funding for Lending has overtaken Quantitative Easing. This has allowed Banks and Building Societies to take cheap cash and pass it on to businesses and mortgage borrowers. 

More recent Bank of England has switched off the funding for mortgages through this channel.Those who benefited most in the mortgage market were those with big deposits. Now Banks are being accused of hoarding cash and shunning SME's.

UK economy 

With falling oil prices and falling inflation,the pressure to raise interest rates has been temporarily removed. 

"If as forecast inflation would average 1% in the first three months of 2015 rising to 1.4% in the fourth quarter and 1.6% by 2016,there remains a real possibility of an interest rate hike later on in 2015. 

Britain is seeing a better type of "low inflation" than the struggling Eurozone ,but supermarket price wars and slippery energy costs cannot be counted for ever. 

Plans to off set rate rise

If interest rates rise, it is possible Governments often could make other changes to soften the blow,the effect can be to spread out the impact over time. But businesses and individuals should however not overlook but plan for the changes and shop around for the best deals whilst making contingency plans.

Savers as sufferers

Soothers for savers has become necessary with the Coalition Government offering special Pension Bonds for Pensioners over 65. 

Contemplating further inducements

Should deflation cause further concern in the short term, it is highly likely that the Bank of England could well reduce the Bank rate to an all time low of  0.25% and progressively increase the rate well after the General Election in  07 May 2015.