Danske Bank predicts interest rates rise delay

Hard-pressed Northern Ireland homeowners should expect a delay in interest rate rises in 2014, according to the chief economist at Danske Bank.

When UK unemployment falls below 7% - which may happen this year - Bank of England governor Mark Carney has said he would consider increasing the historically low 0.5% rate.

However, Angela McGowan from Danske Bank thinks Mr Carney will hold off.

"Our prediction for rate increases would be mid-2015," she said

She said a 1% rise in the Bank of England base rate would see the average mortgage repayments in Northern Ireland increase by up to £50 a month.

Shock

Ms McGowan added: "The Bank of England want interest rates kept as low as they can to ensure sustained economic recovery and even when unemployment reaches 7%, Mark Carney will want to look at other things like business investment and confidence."

She said homeowners - particularly new buyers - should bear in mind the probability of interest rate hikes at some point in the future.

Her opinion was echoed by Kieran Byrne, a mortgage broker from Banbridge who believes many people have a shock in store.

"I find a lot of people, even with the best tuition, will not pay much attention to what future interest rates will be," he said.

"It's not in people's minds when they buy houses.

"They do have an awareness the only way rates can go is up, but the net result is they just want the property."

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