Rate rise begins to hit home
Published On 16 November 2006
The cost of last week's interest rate rise has been filtering through to the high street, hitting borrowers.Last Thursday the Bank of England's monetary policy committee voted to increase the cost of borrowing by a quarter of one per cent.
Interest rates are now at their highest level for five years, as the bank seeks to rein in inflation and take the heat out of the economy.
The Portman building society became the latest lender to increase its standard variable rate to 6.99 per cent, passing on the cost of last week's rise.
With debt still a major issue for British consumers there is concern that higher interest rates will leave some unable to repay their debts.
Furthermore, demand for property is such that many homeowners have overstretched themselves during a period of low interest rates and might now struggle to meet their repayments.
Analysts are split on whether there will be further rate rises next year.
