Interest rate decision ‘clear-cut’

An increase to 5.5 per cent when the Bank of England’s rate-setting monetary policy committee (MPC) would heighten debt management difficulties for millions across the country and for many would raise the specter of bankruptcy.

But in light of the most recent data on the economy and on consumer price index inflation, which topped 3.1 per cent recently for the first time in over a decade, the MPC looks certain to raise the cost of borrowing in May, Dr McLaughlin is convinced.

“Rates will indeed rise again, in the absence of a major change in the economic outlook and the shock acceleration in March inflation…a move in May [is] all the more likely,” he said.

Should the MPC opt to increase its base rate of interest this month, it would put further financial pressure on those aiming to find a debt solution and be the fourth such rise since August of last year.