Base rate to rise to 5.5%?

It's possible the base rate could rise to 5.5%, or even higher. In fact, if so-called core inflation - a misnomer if ever I heard one, as it excludes the core inflation components of food and energy, keeps rising as it did in the latest figures, then it's probably a stone-cold certainty. If that happens, all bets are off as to how far property prices will fall.

However, I think rates will peak at 4.75 or 5 percent. Sooner or later, the relentless rise in interest rates has got to bite. The only question is when.

Borrowers who have enjoyed historically low-interest rates for the past two to five years, and are coming off it within the next six months, will experience the most significant impact as these rates continue to rise. A comparable situation occurred in October of the previous year, during which remortgage borrowers we delt with opted to extend their mortgage terms in order to maintain affordable mortgage payments. Considering the prevailing upward trend in living expenses, it is highly probable that this practice will persist.

The government's ability to address this issue is somewhat constrained, as any potential recourse would likely involve raising specific taxes. However, such a course of action may not be well-received due to the current climate of increased living costs.