A number of expert observers are convinced that the Bank of England will introduce a further rise in the cost of borrowing over the coming months, it has emerged.
With millions of consumers already facing serious debt management difficulties, the base rate of interest could be set to rise for the sixth time since August 2006, according to a number of economic analysts, including Howard Archer from Global Insight.
Mr Archer suggests that despite some uncertainty about the impact of previous base rate rises, another increase in the cost of borrowing is “more likely than not… in the autumn”.
He said: “We believe that six per cent is likely to be the peak in interest rates as we anticipate some moderation in consumer spending and overall growth during the second half of the year will gradually dilute underlying inflationary pressures.
“However, we suspect that the Bank of England will keep interest rates at six per cent for an extended period.”
Figures released recently by the Insolvency Service showed that seven per cent more UK consumers declared bankruptcy during the second quarter of this year during the same period in 2006.