Interest rate rises leaves Brits ‘unsettled’

Finance website Fool.co.uk claims that the increasing popularity of fixed-rate mortgage deals suggests people are worried about the prospect of another rise in the cost of borrowing in the coming months.

And any increase in the base rate would add to the financial pressures already being felt by the many thousands of British consumers currently facing debt management problems and aiming to avoid bankruptcy.

Highlighting some of the issues, David Kuo, head of personal finance at Fool.co.uk, said: “Currently, interest rates are expected to rise 0.25 per cent within the next two months and a further 0.25 per cent six months after that.

“This means homeowners may need to find an extra £83 a month or £996 a year in higher interest payments on a £200,000 loan.”

Earlier this month, the Consumer Credit Counselling Service suggested that financial pressures would see British homeowners “on the rack” throughout 2007.