Start saving now for new year rate hike

According to Lloyds TSB Corporate Markets, 80 per cent of British consumers expect interest rates to be higher this time next year than they are currently, meaning that people should start saving now.

Consumers also felt that prices had risen significantly since last year, adding to the debt burden that ordinary people carry.

Trevor Williams, chief economist at Lloyds TSB Corporate Markets, said: “Rate rises in recent months have obviously dampened consumer optimism and despite the bank rate holding at five per cent this month, consumers are expecting the gloom to continue well into 2007.”

However, he said that the belief in a further increase in the interest rates was not shared with many economists.

Despite this, it always pays to take advice on becoming debt free so that you can be prepared for whatever the economic situation is in 2007.