Interest rates “highly likely” to rise by August

Howard Archer, chief UK and European economist at Global Insight, maintains that despite a fall in consumer price inflation to 2.8 per cent the bank’s monetary policy committee is set to raise rates to 5.75 per cent at least.

The decision would further heighten financial pressures already affecting the millions of consumers around the country facing debt management problems and difficulties in finding a debt solution.

Mr Archer commented: “The Bank of England still seems highly likely to raise interest rates by a further 25 basis points to 5.75 per cent by August at the latest as further insurance against the longer term inflationary dangers.”

Any rise in the base rate of interest before August would represent the fifth such increase within a year as personal debt levels continue to mount up.