What the papers say- 4th August 2010

The debate surrounding interest rate predictions continued today, with two former policymakers warning that base rate could rise to as much as 3% by this time next year, following a period of economic stability. As pointed out in both the Times and the Telegraph, this differs greatly from the majority of forecasts for a longer period of low rates, and will come as a shock to many homeowners. Rather fortuitously then, the Daily Mail reported that Barclays has re-introduced its range of drop lock mortgages, which allow borrowers to take a tracker rate with the option to switch to a fixed rate at a later date without paying an Early Repayment Charge. Lenders such as Nationwide also offer this type of product, which could prove to be a welcome option for borrowers concerned about what the future may bring. Elsewhere the Daily Mirror revealed that Northern Rock Asset Management has announced a profit of £350 million, and has also repaid £300m of their controversial Government loan, leaving £22.5bn outstanding.