Investors forecast interest rate rises

Any such increase would heighten the debt management problems of millions of homeowners and credit consumers in the UK, but figures from Barclays show that a large majority of investment experts expect the cost of borrowing to rise.

In fact, 45 per cent of those polled forecast that interest rates will reach six per cent before the end of the year, while 41 per cent suggest 5.75 per cent will represent the peak in the UK’s cost of borrowing.

Henk Potts, equity analyst at Barclays Stockbrokers, said: “At the start of this year, there were hopes that interest rates would peak at 5.5 per cent. However, the threat of inflation appears to be more of a risk than was previously envisaged.

“As a result, there is further pressure on the monetary policy committee to take rates to 5.75 per cent.

Online mortgage firm mform.co.uk suggested recently that if interest rates rise there will be many homeowners in the UK who could benefit from debt advice as they take steps to deal with increased repayment rates.

track