Rates must rise, says Lib Dem MP

Vince Cable, economic spokesperson for the Liberal Democrat Party, has claimed that the base rate of interest will have to rise over the course of the next few months.

Mr Cable insists that a further increase in the cost of borrowing, which will be the sixth since August of last year, appears to be necessary to stave off inflationary pressures affecting the UK economy.

Reflecting on the increased debt management pressures consumers are likely to face as a result of another base rate rise, Mr Cable describes the financial circumstances of many British households as being “seriously grim”.

“There is now a clear consensus that rates will have to rise further due to powerful inflationary forces in the world economy, notably rising energy and food prices,” he said.

Adding: “It is difficult to foresee anything other than a continuing rise in the number of people facing repossession and personal bankruptcy.”

Figures from the Insolvency Service recently showed a seven per cent rise in the number of people entering bankruptcy in the UK during the second three months of this year as compared to the same period of 2006.