Interest rates predictions: Why I'll keep betting on low rates The same behaviour can be observed elsewhere in the financial world. It's human nature, it seems, to expect what has happened before to happen again. If you ask a group of stockbrokers the return they expect for the stock market, expect a median answer of 6pc or 7pc. It just so happens that long-term returns from shares are, you guessed it, around 6pc or 7pc. Ask economists how fast they expect the economy to grow, and they tend to make an estimate of between 2pc and 3pc a year - which has been the historic pace of expansion. The independent Office for Budget Responsibility (OBR), created with great fanfare in 2010, appears guilty of such blinkered thinking. At the Coalition's first Budget in June 2010, the OBR predicted that the economy would grow by nearly 6pc by the autumn of 2012. Of course - the economy always bounces back after a recession, doesn't it? In reality, GDP grew by a paltry 0.9pc. The OBR's most recent assessment, from December, projects growth to be 2pc in 2014, 2.3pc in 2015, 2.7pc in 2016 and 2.8pc in 2017 - each forecast nicely nestled within that 2pc to 3pc average range. I don't envy the job of official forecasters. Making accurate calls on anything financial is a thankless task that often ends with an egg-covered face. So who made the correct calls? Capital Economics, a forecasting company, demonstrated insight when it predicted four years ago that rates would remain "very low for a prolonged period." Today, it expects no rise until at least the end of 2014. Professor Peter Spencer from the Ernst & Young Item Club, a forecasting group of economists, was also prescient in the summer of 2010 with his prediction that "a base rate of 0.5pc will begin to look like the new normal," forecasting no change until 2014. The Item Club's most recent guess was that Bank Rate would rise to 1pc in 2015 and 2pc in 2016. That is not wildly dissimilar from what the market now predicts. As the Bank of England's quarterly Inflation Report acknowledged earlier this month, money markets expect the first rise in late 2015. (see the relevant cutting from the report below) There's only one reason rates will rise - spiralling inflation - and many, many reasons why they won't. The Bank will be concerned about the effect that increased borrowing costs would have on consumers, on the banks that lend to them and, of course, the highly indebted government. Tightening monetary policy would also strengthen the pound and hurt British exporters. If inflation does take off, the Bank might be inclined to unwind its £375bn programme of quantitative easing - electronic money printing - before even considering the tool of rates. The reality is that next month it is expected to do the opposite and print more money. For my part, I have flocked with the interest rate "doves" since the crisis began. I've stuck with a lifetime "tracker" mortgage despite the temptations of falling fixed rates. After further falls in recent weeks, taking a fix would now add only a quarter of a percentage point to my rate, plus the costs of remortgaging, in exchange for two years" peace of mind. It's simply not worth it. None of this is what savers want to hear, and not what they deserve. Their predicament has been worsened by the £80bn Funding for Lending scheme, which hands cheap money to lenders. It has pushed down savings rates as much as it has the cost of loans. With the scheme far from exhausted, savers could face more of the same. But perhaps the wisest approach is not to try to second-guess future central bank action and just do what you can to protect your own finances: if rate rises would buckle your finances, take a fixed mortgage; if you need to secure income, grab what you can get. Our cash Isa round-up is the perfect starting point.