Best Buys Week 09/06/08

Residential
Fixed rate @ 5.69% for 5 years
Early Repayment Charges: payable for 5 years
Lender Arrangement Fee: £1,499

A very competitive purchase rate available up to 60% LTV. Also available for remortgages with free valuation & legal fees @ 5.79%

BTL
Fixed rate @ 6.29 for 5 years
Early Repayment Charges: 6% for years
Lender Arrangement Fee: 2.0% (added to the loan)

After the MPC unsurprisingly left UK base rates on hold at 5%, the European Central Bank held theirs at 4% and issued a statement implying that inflation concerns mean the next move could be upwards. Markets are now pricing in a rise to 4.25% as early as next month and analysts are divided as to whether the MPC will follow suit. A further shock was provided by factory gate inflation figures published Monday, 9th of June which showed the steepest rise since 1986. This lead to money markets pricing in up to 3 further rate rises of (0.25% each) by the end of 2008

The ECB's statement caused dollar weakness, which in turn lead to a record move in the oil price. Having settled down to U$ 123 per barrel, the ECB's comments saw a surge of U$ 16 on Thursday and Friday, a record move which lead to a new record price of U$ 139 a barrel. Thus ironically the ECBs tough statements on inflation have stoked oil prices further and increased this inflationary threat.

Poor US unemployment figures and UK economic data proved a further drag on stock markets already reeling from the effect of Bradford & Bingley's profit warning. The FTSE is firmly back below 6,000 with bank shares in particular suffering on poor UK housing data.