Interest Rates On The Up And Up

THOSE financial boffins at the Bank Of England just can’t stop fiddling with interest rates, can they? Yesterday’s quarter point increase to a six-year high 5.5 per cent is the fourth such hike since August and is yet another kick in the privates for the nation’s homeowners.

The increase, introduced to combat rising inflation, will add around £16 a month to a typical £100,000 mortgage bill, while homeowners with a £200,000 repayment mortgage have seen their repayments increase by over £1000 since last August.

Indeed, Adam Sampson of housing charity Shelter said that these latest rises could be “the final nail in the coffin for many borrowers hoping to keep their homes”.

He adds: “Thousands of families are already overstretching their finances to keep a roof over their heads”.

While some doom-mongers are predicting even more rate rises in the summer, CBI bigwig Ian McCafferty has a more rosy outlook. Says he: “While we fully accept the need for today’s rate rise, we see no reason for a further increase at present, as the impact of the 1% increase in rates since last August should be sufficient to keep inflation pressures into 2008 under control.”

Anyone believe that?

Anorak

Posted: 11th, May 2007 | In: Money Comment | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink