Interest rates are widely expected to be held at 0.5% again today when the Bank of England’s Monetary Policy Committee announces its latest base rate decision.
And it could be quite some time yet until rates eventually begin to rise if indications from spread betting company Spreadex are to be believed.
The firm allows investors to place bets on future LIBOR quotes – the interest rate at which banks lend to each other.
And due to a lack of movement in the forthcoming months’ prices, customers have been requesting future prices as far out as December 2010, with the quote for that particular date predicting three month LIBOR to be at between 2.7 and 2.8% compared to the current 1.44% three month level.
Spreadex spokesman Andy MacKenzie said: “The big question for many homeowners and savers is ‘when will interest rates eventually start rising again from the current historic lows?’ and that’s what many of our clients are also trying to predict.
“We’ve had some customers requesting quotes for as far afield as 19 months time in order to find prices they feel are worth speculating on.
“While LIBOR rates are different from the base rate they still give a good indication of where levels will go and our quotes suggest there won’t be any great rise in rates for some time to come.
“This is not great news for savers looking to improve their returns, but it is reassuring for mortgage owners who may be fearful of payment hikes lying just around the corner.”
Spreadex
Spreadex Ltd is a financial and sports spread betting firm, which is authorised and regulated by the Financial Services Authority. They specialise in the personal service and credit area.
For a review of the Spreadex financial spread betting service see: Spreadex review.
Risk Warning: Spread betting carries a high level of risk to your capital. You may lose more than your initial investment. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.
'Interest Rates may not rise until Dec 2010' by Spreadex, updated 07-May-09
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Risk Warning: Spread betting carries a high level of risk to your capital and you may lose more than your initial investment. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.
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