Homeowners were today warned to be ‘primed and ready’ for interest rates to rise, as the Bank of England signalled a hike early next year.

Governor Mark Carney said the time for a rate hike from historic lows is ‘drawing closer’.

He was urged to ensure any increase was ‘slow and steady’ so families have time to adjust to rising mortgage bills.

After six years of stability in interest rates, there are concerns that millions of people have grown used to low mortgage bills and will struggle to cope if costs start to rise.

The Monetary Policy Committee – which sets interest rates – was split on the prospect of an increase for the first time this year.

Members voted 8-1 to leave interest rates on hold this month at 0.5 percent, where they have remained for more than six years.

Inflation is expected to remain low thanks to falling oil prices and the strengthening of the pound, which makes imports cheaper.

It makes it less likely that rates will rise early, although one official, Ian McCafferty, voted to increase rates by 0.25 per cent to 0.75 per cent.

The markets expect to rises of 0.25 per cent from May next year, although some predict the first increase will happen in February.

After six years of stability in interest rates, there are concerns that millions of people have grown used to low mortgage bills and will struggle to cope if costs start to rise.

Gillian Guy, chief executive of Citizens Advice, said: ‘Households need to be primed and ready for a rise in interest rates. Many people are just about managing financially which means even a small interest rate rise can tip them over the edge.

‘Any rise in interest rates must be slow and steady so people have time to adjust. It is crucial that people have access to free money and debt advice in order to budget for a rate rise.

‘Creditors can help borrowers by explaining the impact a rise will have and help them to prepare, as well as recognising where they can be flexible to help people keep afloat.’


NEWSLETTER SIGN UP

Get the latest breaking news & specials from Alex Jones and the Infowars Crew.

Related Articles


Comments