Brits wrong over interest rates

10/12/2008

Britons wrongly predicted that interest rates would reach five per cent or above by the end of 2008.

Research from the Fair Investment Company has revealed that opinions on money have changed dramatically over the past 12 months.

Over a third of those polled by the firm in January said that interest rates would reach at least five per cent by the end of this year.

Fair Investment suggests that this shows how unexpected the credit crisis was and how conditions have worsened.

Sharon Bratley, chartered financial planner, said: "The results of the poll back in January just go to show that people really didn't expect such economic turmoil to happen.

"Interest rates have now been slashed to just two per cent in a desperate attempt to stimulate lending and the economy."

The research revealed that ten per cent of borrowers expected rates to reach 5.75 per cent of more, which Ms Bratley suggests highlights "what little grasp we had of things to come".

"Since then the mortgage market has constricted, forcing the value of property down, and jobs and the retail industry are in real danger," she added, concluding that this month's rate cut must be passed on to businesses and consumers.

Tags; Income Worries and Debt,

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