Banker sees end to low interest rates
20 December 2010
THE cost of farm borrowing could soon rise – despite another Bank of England decision to leave interest rates unchanged, believes a banker.
Look at the link here and start to be concerned. A banker is now predicting that the low base rate we have enjoyed for nearly 2 years is at a low. We are seeing, in this industry, a rise in the fixed money costs, around 0.30% in last couple of weeks.
Inflation is the big issue and generally the Bank of England has only got the tweeking of base rate to start to bring it down. Of course, there are many more factors and raw material costs are the main one it would seem but we cannot continue to see inflation rise without some sort of reaction.
The continued tricky trading in this year and next and the public sector job cuts should protect us from the worst scenarios as they cannot continue to increase base rates unreservedly but it is a real problem and a head scratcher for sure.
Watch this space, and for anyone looking to borrow over the next few months maybe a fixed rate deal may be a better option if you intend to keep the borrowing on the books for some time.
Of course, you can always call Credo for the low down and for free advise.