Rates 'will not rise this year'

Landlords are likely to be protected from base rate rises until the second half of next year.

This is according to a new survey from the BBC, which polled 28 top economists. The survey found that 93 per cent of respondents believed that rates will remain at their historic low of 0.5 per cent at least until the end of the year.

More than half of those surveyed said they think rates will begin to rise during the second half of 2015, while 80 per cent believe that the base rate will increase at some point during next year.

Just 7 per cent of respondents believe the base rate will rise during 2014.

Bank of England governor Mark Carney recently gave “forward guidance” on the base rate, suggesting that it would not fall until unemployment dropped to 7 per cent. Consecutive cuts to the headline rate of unemployment have lead some to suggest that rates could therefore rise in 2014, but many commentators now suggest that too much prominence is being given to the unemployment figure.

Meanwhile the Resolution Foundation has warned that a rate rise could cause financial distress to some two million families. In the event of rises the think tank expects the number of families spending more than half of their disposable income on debt repayments tripling by 2018.

Rate rises would also impact the UK’s small businesses. Read more about the impact of interest rates on small firms.