Brits struggling as borrowing costs rise

Many thousands of families across the UK are struggling to become debt free because of the increases in the cost of borrowing being introduced nationwide, according to recent research.

A study by MoneyExpert found that the typical cost of borrowing in the UK has risen at a considerably faster pace than the Bank of England’s base rate of interest and credit consumers are thought to be suffering as a result.

The price comparison firm’s figures show that debt management is proving difficult for almost everyone with outstanding arrears and that close to one million Britons have missed a loan repayment deadline during the past six months.

A statement from MoneyExpert read: “Since November 2006 average loan rates have increased by more than the base rate across every single loan value threshold.”

Last week, the Bank of England opted not reduce the base rate of interest, but instead to maintain it at its current level of 5.5 per cent.