On Thursday last week, the Bank of England’s Monetary Policy Committee (MPC) announced that the base rate of interest in the UK for loans and savings was to remain at its historically low level of just 0.5 per cent for another month.

Whilst many people with variable interest rates of their home owner loan, often hold their breath every time the MPC make an announcement regarding their loan rate, others have now accepted cheap loan rats as the norm and for those home owner who have bought in the past couple of years or so, many do not know any different and a rate rise on their loan would come as a great shock.

However, the base rate could possibly remain at the same low level until 2016, according to the latest predictions from the Centre for Economics and Business Research (CEBR), due to the fact that they believe that the UK has already fallen back into recession.

The CEBR figures show significant decline in growth over the course of the last three months of last year and predict further contractions in the economy in the coming twelve months, which would certainly force the Bank of England to keep loan rates on hold for this long at least.

Douglas McWilliams of the CEBR said “We take no pleasure in outlining such a bleak forecast, but the world is going through a fundamental change where previously poor countries are industrialising fast. This is good news for them, but some of the growth is at our expense.”

Regardless of these predictions, borrowers should not become complacent about their currently cheap loan rates and should endeavour to overpay on their loans whilst rates are low, in order to reduce their overall loan balance for wen interest rates do eventually rise.”