Interest rate rise remains “likely

The minutes from the meeting of the rate-setting committee revealed that only one of nine members in attendance voted for a rise this month, but Global Insight’s Howard Archer maintains that a quarter-point increase could be seen soon.

Currently at 5.25 per cent, any increase in the cost of borrowing would put further pressure on the finances of those facing debt management difficulties and Mr Archer has suggested a “hike to 5.50 per cent remains more likely than not”.

“The minutes are likely to fuel speculation that the Bank of England may be done on raising interest rates,” commented the Global Insight’s UK and European economist.

“Nevertheless…we still expect interest rates to rise by a further 25
basis points to a peak of 5.50 per cent,” he made clear.

Since August last year, a debt management plan has been made more difficult to form for thousands of Brits as a result of three quarter-point rises in the cost of borrowing money.