Bank set to “turn the screw on borrowers”

Inflation rises and the ongoing growth in property markets around the UK will see the bank increase its base rate of interest to 5.5 per cent, suggests director of housing at Legal & General, Stephen Smith.

“With inflation running away and the property boom ongoing, it is likely that the Bank of England will want to put a cool flannel on the economy’s brow,” said Mr Smith.

And Mr Smith went on to make clear that a rise in the interest rate will “turn the screw on borrowers”.

He added that those credit consumers who have taken on large amounts of personal loan or credit card debt look likely to be the ones to “take a hit” in the event of a further rate rise.

There have been 58 increases in the cost of borrowing introduced across Britain over the course of the last 30 years and three of those have come since August of last year.