Interest rate increase
[Following the Bank of England's decision to increase interest rates by 0.25 per cent, numerous debt charities have claimed Britain's financial problems are to increase as homeowners set to pay an additional £35.92 on average every month.]
The Bank of England's decision to increase interest rates for the second time in three months has been met with criticism that it will force more people in debt.
On November 9th, the bank announced interest would go increase by 0.25 percentage points, up to five per cent – the highest figure since the aftermath of the September 11th bombings.
However, it is has been claimed a number of debt charities that the move could further increase Britain's debt problems, as costs are expected to be reflected in further increases in house prices.
A new study published by Egg on November 10th suggested that homeowners would have to pay an additional £35.92 on average each month - a total figure of £292 million.
Sue Edwards, debt officer for the Citizens Advice Bureaux said: "Any increase in mortgage interest rates could spell disaster for people whose finances are balanced on the very edge of affordability."
A report by the charity, on November 7th, revealed the number of people with housing debt to have increased by 20 per cent over the past year.
British Retail Consortium director Kevin Hawkins also said: "The bank should have waited until early next year to see the full impact of August's rate rise.
"By piling another rise on top the Bank has made it more likely economic activity will be depressed over the next six months."