Further interest rate hike ‘in the balance’

The Bank of England’s monetary policy committee (MPC) has increased the cost of borrowing from 4.5 per cent prior to August 2006 to the current 5.25 per cent rate and may well consider a further rise is necessary this month, Mr Archer claims.

And a quarter point rise, which would prompt an increase in credit card debt repayments, could happen this month given the disagreement among the rate-setting committee in February’s meeting, the UK and European economist suggests.

Revealing better news though for those people looking to ClearDebt more quickly, Mr Archer commented: “We believe that 5.5 per cent will mark the peak in rates as growth loses some momentum over the coming months and inflation heads back down.”

The aim of adjusting interest rates across the UK is to establish stability of prices and low levels of inflation, the MPC explains.