Low interest rates - but for how long?

There has been a great deal of bouyant talk about interest staying low into 2014 or beyond, but here is a cautionary word from Nadeem Walayat from The Market Oracle :

"In my opinion It is not possible to accurately project UK interest rates beyond more than 12 months forward given the risks that the budget deficit of 15% of GDP and debt monetization pose to the currency and the wider uncertainty of global instability that could result in stagflation i.e. high inflation and low growth, therefore it is highly probable (90%) that the CEBR's interest rate forecast of UK interest rates remaining below 2% until 2014 will prove to be wrong ."

My comment.

It is clear from the mortgage interest rates being offered that lenders are comfortable about interest rate stability for at least the next 2 years with cheap 2 year fixed and tracker rates. 3, 4 and 5 year rates are much higher - which must reflect uncertainty about longer term financial stability.

I am finding that mortgages are getting a little easier to place, which is a reflection of improved cash liquidity among the lenders - a good signal that there the mortgage market should be ready to spring in the New Year (no pun intended!).

There is little doubt in my mind that 2010 will be a good time to buy and sell.

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