Interest Rate Rises For The Year Ahead

Yesterday’s announcements of rises in interest rates seems necessary but rather daunting for us. As most of you will already know the inevitable is going to happen this year with the long overdue and awaited rise in the Bank of England’s interest rates.

This is a scary prospect for many households across the country.

The cost of fuel has risen. The price of food has gone up in a sharp manner. VAT went up by 2.5% this year, to 20%. Again causing all goods with VAT added on top to cost more. Clothes, shopping in general, heating our homes, it’s all risen.

Whilst this has been happening our wages have stayed stagnant and in the efforts to save job cuts some employees have taken wage drops with the hopeful security that they will have a job still in a years time.

So now we must face a rise in the interest rates. How is this going to affect us?

Firstly we have been at the lowest rates for decades, so all those with mortgages have been enjoying this benefit. When the government start to raise the rate of interest, those getting by due to low mortgage payments are going to find it tough again. If we rise to the former rates of 2007, peoples mortgage payments will be approximately three times higher then today’s.

This alone will cause many more repossessions, with people unable to afford their commitments. It was always going to have to happen, its just unfortunate that it is something that now must be considered for this year.

Can it get any worse? Other European countries around us our reaping the rewards of growing economies…Ours is shrinking.

I am silently hoping for a good year and a fast turn around to a growing economy once again, I’m just unsure of how this can happen…

Daniel Zane London

Daniel Zane is owner of London property inventories one of the UK’s leading suppliers of property inventories.