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Risk of ‘false comfort’ for borrowers

Money Advice Trust comments on MPC interest rate decision

The Bank of England has released its latest Monetary Policy Committee interest rates decision, minutes and inflation report.

Jane Tully, head of insight and engagement at the Money Advice Trust, the charity that runs National Debtline, commented:

“Signs that interest rates will not rise until next spring give borrowers a little more time – but we should not take false comfort from this news.  There remains only a relatively short window for households to prepare for the impact that higher interest rates will have on their finances.

“Our message to borrowers is clear.  Whether you have a mortgage, personal loan or outstanding balances on credit cards – interest rates are going to rise, and it is highly likely you will have extra costs to pay.

“Rising interest rates will affect renters too, as many private landlords will pass on their higher mortgage costs to their tenants.  This will add further pressure to household budgets already squeezed by sharp rent increases in the last few years.

“Households need to look at their finances now, to make sure they can absorb these extra costs.  Crucially, now is the time to act if you are worried about your ability to meet your repayments – by seeking free advice a charity-run service such as National Debtline as soon as possible.”

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