Bank warns of further rate hikes

Mervyn King, governor of the Bank of England, said that inflation was still too high, prompting fears that the rate could rise to five per cent before the end of the year.

“The anticipated fall in inflation for September may not persist for long,” Mr King warned an audience in Winchester.

Britain’s interest rate already stands at 4.75 per cent following a rise in August but most commentators believe that there will be a further increase soon.

While falling oil prices had caused some to think that inflation may be tackled, Mr King stated that this is not likely to be enough to put off another increase.

If so, with many already facing large monthly repayments, many people may be tempted to look at a debt management plan now for if and when a rise comes in.