Vince Cable, economics spokesman for the Liberal Democrats, said that with debt standing at record levels and unemployment rising, the increase from 4.75 per cent will be a “catastrophe” for many families.
“People are now facing a three pronged attack from rising interest rates, rising unemployment and record levels of personal debt. This will spell further catastrophe for many hard working families,” the MP said.
Last week the monetary policy committee voted to raise the interest rate to its highest level in five years in a bid to tackle inflation.
However, anyone with a loan or mortgage linked to the base rate will have the amount they have to repay each month pushed up, increasing the danger that the will become deeper in debt.
With this in mind, many may wish to take on debt advice to help manage their finances and avoid financial misery.